Integrated Report2022

Coca-Cola Bottlers Japan Holdings Inc.
Tokyo Midtown Tower, 9-7-1 Akasaka, Minato-ku, Tokyo 107-6211
For inquiries:
Please use the Inquiries form on
the Coca-Cola Bottlers Japan Holdings Inc. website.

https://en.ccbj-holdings.com/inquiry/©2023 Coca-Cola Bottlers Japan Holdings Inc. All Rights Reserved.

Coca-Cola Bottlers Japan Holdings Inc.

1

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

2

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

3

Value Creation Story

Introduction

Contents

Introduction
1 Corporate Philosophy
3 Contents
4 Information Disclosure System /Editorial Policy

Sustainability

Risk Management

Governance

Financial /Corporate Information

4

Information Disclosure System / Editorial Policy

Part 3CCBJH Group’s Information Disclosure

37 Sustainability

We disclose information in a timely and appropriate manner toenable stakeholders to better understand our business and to place
their trust in the CCBJH Group. This Integrated Report is produced
to broadly communicate financial and non-financial information to

our stakeholders. Comprehensive information on investor relations
and our environmental, social and governance (ESG) initiatives areavailable on our website.

Financial information

Non-Financial information

39 Sustainability Strategy
41 Initiatives Based on CSV Goals
Inclusion

43

5 Coca-Cola Bottlers Japan Holdingsin the World

Investor Relations

7 Coca-Cola Bottlers Japan Holdings
in JapanFinancial &Non-Financial Strategy

Communities

47

Sustainability

Integrated Report

Part 1

9 Value Creation Story

11 Message From the President

Resources

51• Earnings Presentation• Earnings Release• Securities Report

Integrated Report2022• Corporate Governance Report• TCFD• GRI Content Index• ESG Data
• GHG Emissions Results Basedon the GHG Protocol• External Evaluation

Shareholder Information
Coca-Cola Bottlers Japan Holdings Inc.

Integrated Reporthttps://en.ccbjholdings.com/ir/library/annual.php
https://en.ccbj-holdings.com/ir/library/annual.php

Part 455 Risk Management
15 Value Creation Process
17 Process for Identifying Material Issues
20 Material Issues

57 Business Resilience Strategy
59 Managing Risk and Leveraging Opportunities
65 Disclosure Based on TCFD Recommendations

Part 2

Part 521 Financial & Non-Financial Strategy

67 Governance

23 Message From the CFO

69 Corporate Governance Strategy
71 Corporate Governance

Financial / Corporate Information
79 Overview of Full-Year 2022 Results
81 Key Financial and Non-Financial Data
83 External Evaluations
25
27
29
31
33
35

Commercial Strategy

Initiatives by Channel

Initiatives by Category
SCM Strategy

Procurement Strategy
People Strategy

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

Participation in External Initiatives

84 Company Overview and Stock Information
85 Group Companies / Glossary
86 Third-Party Opinion

Investor Relations

Sustainability

https://en.ccbj-holdings.com/ir/

https://en.ccbji.co.jp/csv/

Editorial Policy
This document is provided as a report related to value creation at CCBJH based on the IFRS Foundation’s International Integrated Reporting
Framework and the Ministry of Economy, Trade and Industry’s Guidance for Collaborative Value Creation. For sustainability information, we
have referred to the GRI Sustainability Reporting Standards of the Global Reporting Initiative and the final report of the Task Force on
Climate-related Financial Disclosures (TCFD).
Period covered

This report covers activities from January 2022 to the end of December 2022. (Including some activities reported in 2023)
Numerical data is also for the period from January 2022 to the end of December 2022.

Scope of the report

Information presented in this report was collected from Coca-Cola Bottlers Japan Holdings Inc., Coca-Cola Bottlers Japan Inc.,and the Coca-Cola Bottlers Japan Group companies* (Details on page 85 Our Group Companies).

Date of issue

June 2023

Company names

CCBJH Group (we) Coca-Cola Bottlers Japan Holdings Inc. and eight consolidated subsidiaries (Coca-Cola Bottlers Japan Inc.,and the Coca-Cola Bottlers Japan Group companies).
(As of December 31, 2022)
CCBJI

Coca-Cola Bottlers Japan Inc.

CCBJI Group

Coca-Cola Bottlers Japan Inc. and its Group companies* Coca-Cola Customer Marketing Co., Ltd., Coca-Cola Bottlers Japan Vending Inc., FV Japan Co., Ltd., Kadiac Co., Ltd.,
Coca-Cola Bottlers Japan Business Services Inc., and Coca-Cola Bottlers Japan Benefit Inc., Bannai Saketen Inc.
Forward-Looking Statements
The plans, forecasts, business strategies, and other statements described in this document contain forecasts based on our judgment in light of the information available at thetime the materials were prepared.
Note that these forecasts may differ materially from actual results due to various risks and uncertainties.
Please refer to the 2022 Full-Year Earnings Presentation for the assumptions used for earnings forecasts and precautions regarding their use.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

5

Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Governance

Financial /Corporate Information

6

Coca-Cola Bottlers Japan Holdings in the World

Member of the Global Coca-Cola System

The Coca-Cola
Company(TCCC)

Bottling partners

225

Approx.
around the world

Revenue$

Leveraging our strengths as a part of the global Coca-Cola System

Coca-Cola Bottlers Japan Holdings Inc.
One of the largest in Asia and one of
the leading bottlers in the world

The Coca-Cola System around the world

43 billion

The Coca-Cola System consists of The Coca-Cola Company
and around 225 Coca-Cola bottling partners worldwide. It sells
Coca-Cola and various other beverages in more than 200
countries and territories. This worldwide network has allowed
us to accumulate tremendous knowledge and experience andis one of the key sources of our sustainable growth andReaching
people all over
the world(2022 result)

Collaboration on
product developmentcompetitiveness. In particular, close collaboration in terms of
product development, the introduction of global standard coresystems, participation in global operations, and exchange ofhuman resources has led to the creation of synergy throughout
the Coca-Cola System.

Within the global Coca-Cola System, Japan launches the largest number of new
products each year. It also plays a leading role in driving innovation throughout the
Coca-Cola System. The Coca-Cola System’s global product development, nurturing
structure and access to powerful global brands are among our strengths. One recent
example of collaboration is the global planning and development of alcoholic
beverages, starting with the Coca-Cola System’s first alcoholic beverage, Lemon-dou,
in Japan. This was followed by the launch of Jack Daniel’Z *VJHϏ*VSHPU4L_PJVPU
2022 and in Japan in April 2023. We are also working to enhance our market
competitiveness by leveraging our strengths on a global scale. This includes theintroduction of Costa Coffee, the No. 1* café brand in Europe, to the Japanese market.
* According to Allegra’s 2021 World Coffee Portal

Subsidiary of The Coca-Cola Company
Coca-Cola (Japan) Company

Global standard
operations

We introduced an ERP system called CokeOne+ that covers back-office andcustomer service. CokeOne+ is a template of Enterprise Resource Planning (ERP)system developed by the global Coca-Cola System that enables complex businessprocesses to be carried out on a common platform, centered on the centralized
management and visualization of a wide range of information. It is helpful instrengthening management analysis capabilities, improving business quality andprocesses, and promoting efficiency. In addition, in the area of procurement, we areworking with the Cross Enterprise Procurement Group (CEPG), the Coca-Colasystem’s global procurement network, to take advantage of a global procurement
scale and prepare transaction guidelines based on global standards.

Exchange ofhuman resources

We engage in human resource exchanges with Coca-Cola bottlers around the world,
including Coca-Cola Hellenic (a bottler that does business primarily in Central and,HZ[LYU,\YVWL*VJH*VSH-,4:(IV[[SLYPU3H[PU(TLYPJHHUK*VJH*VSHBeverages Philippines (a bottler that does business primarily in Southeast andSouthwest Asia and India). These exchanges involve short-term appointments toshare success stories and build long-term collaborative relationships. We also
actively engage in intra-company communication in our daily operations, holding
regular meetings at the division level with the participation of representatives frombottlers. We use these opportunities for human resource exchange to promotetransformation based on global business experience, knowledge, and successstories, as well as to develop global human resources internally.

Coca-Cola Bottlers Japan Holdings Inc. (CCBJH) and the Coca-Cola System around the world
In 1886, Coca-Cola was born in Atlanta, Georgia. The franchisesystem established by The Coca-Cola Company allowed othercompanies to bottle and distribute Coca-Cola, which facilitated
its expansion across the United States. In time, franchisebusinesses established bottling plants in every continent,
leading to the worldwide distribution of Coca-Cola.
The Coca-Cola Company distributes beverage base toauthorized bottling partners in specific economic regions.
These bottling partners, also known as “bottlers,” mix thebeverage base with carbonated or distilled water andsweeteners to create a finished beverage. The finished productis then packaged and sold. The Coca-Cola System today sells
Coca-Cola and various other products in more than 200
countries and territories.
The CCBJH Group is one such bottler that has enteredinto a franchise agreement with Coca-Cola (Japan) Company,
which is the Japanese subsidiary of The Coca-Cola Company.
Our business operations encompass Tokyo, Osaka, Kyoto, anda further 35 Japanese prefectures.

Global sales ratio by region in the Coca-Cola System
Employees supporting
the Coca-Cola business
Europe,Middle East,
and Africa

28%

700,000

More thanaround the world

North America
Asia

24%

17%

Coca-Cola product sales area
South America

27%

Note: Others 4%

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

200

More thancountries and territories
Source: 2022 Business & Sustainability
Report of The Coca-Cola Company

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

7

Introduction

Financial &Non-Financial Strategy

Value Creation Story

Sustainability

Risk Management

Financial /Corporate Information

Governance8

Coca-Cola Bottlers Japan Holdings in Japan

Largest Bottler in Japan
Accumulated capital and strengths

The Coca-Cola System in Japan working in alignment

600

More than
product varieties

Hokkaido
Coca-Cola
Bottling
Co., Ltd.

Procurement

Sales plan
Michinoku
Coca-Cola
Bottling
Co., Ltd.

Beverage
base
production

MarketingCoca-Cola
Bottlers Japan
Holdings

Coca-Cola
Japan

Align
Researchanddevelopment

Hokuriku
Coca-Cola
Bottling
Co., Ltd.

PlantsPlantsReaching people
all over Japan
Manufacturing &Commercial
capitalManufacturing&
Commercial capital

Collection /Recycling
Sales /
Marketing

Okinawa
Coca-Cola
Bottling
Co., Ltd.

90

About
% of sales volume
in the Coca-Cola System in Japan

2015

1956–1999

Expansion of
manufacturing
and sales area

Improved
competitivenessthrough streamlining

17 bottlers

6 bottlers

Tokyo

Tone

MikuniSendai

ChukyoFuji

Kitakyushu

Sanyo

MikasaKinki

MinamiKyushuShikoku

Hokkaido

Michinoku

Hokuriku

NaganoOkinawa

2001–2015
Corporate
restructureIntellectual
capitalIntellectual
capital

1999–2015
Corporate
restructure

1984

Merger of
two companies

needs, enhancing customer service, and ensuring quality control.
The first Japan bottler was established in 1956, and that
number grew to 17 across the country. In the 1990s, bottler
consolidations began and in April 2017, Coca-Cola East
Company, Limited (CCEJ) and Coca-Cola West Company,
Limited (CCW) merged to form Coca-Cola Bottlers Japan Inc*.
Currently, ourselves and four other bottlers sell Coca-Cola andother beverages throughout Japan.

Human capital
Human capital

About
About

About
About

40
40

Social capitalSocial capital

Scaling up for
greater businessstrength

2017

Natural capital
Natural capital

CCBJI*

CCW
Hokkaido

Michinoku

Hokkaido

Michinoku

Hokuriku

Okinawa

Hokuriku

Okinawa

About
About

300
300

About
About

700,000
700,000

Bottling partners worldwide
Bottling partners worldwide

About
About

225
225

14,50014,500

Sales area
Sales area2017

* Trade name changed to Coca-Cola Bottlers Japan Holdings Inc. (CCBJH) on January 1, 2018

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

17
17

Vending machines
Vending machines

Number of employees
Number of employees

5 bottlers

CCEJ

Sales/distribution centers
Sales/distribution centers

Brands in Japan
Brands in Japan

Strengthening the business foundation in JapanThe Coca-Cola System in Japan comprises The Coca-Cola(Japan) Company, Limited, which is The Coca-Cola Company’s
Japanese subsidiary responsible for supplying beverage bases,
planning and developing products, and conducting marketing
activities. Bottlers and affiliates manufacture and sell the products.
These companies work in close partnership to grow the Coca-Colabusiness by improving production efficiency, maintaining a
consumer-oriented approach, responding quickly to market

We deliver safe and high-quality Coca-Cola products tocustomers and business partners and provide attentive service
with the aim of achieving our mission to deliver happy moments
to everyone while creating value.

Production

Logistics

Planning

The CCBJH Group is the largest Coca-Cola bottler in Japan,
responsible for approximately 90% of the sales volume of the
Coca-Cola System in Japan. Among about 225 bottlingpartners worldwide, we are one of the largest in Asia in terms ofrevenue and one of the leading bottlers in the world.

Financial
capitalFinancial
capitalConsumers in sales area
Consumers in sales area

Tokyo, Osaka, Kyoto
Tokyo, Osaka, Kyoto
andprefecturesandprefectures(53 million households)(53 million households)

Water usage
Water usage

Water replenishment rate
Water replenishment rate

Total assets
Total assets

RatingRating

35
35

About
About

111
million
111 million

13,287,000
420
m³
13,287,000 m³
420%%
Approx.
Approx.

yen A+(R&I)/AA-(JCR)
830
billion yen A+(R&I)/AA-(JCR)
830 billion
As of December 31, 2022

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

9

Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Governance

Financial /Corporate Information

10

Part 1

Value Creation Story
11

Message From the President

15

Value Creation Process

17

Process for Identifying Material Issues

20

Material Issues

Tsunoshima Bridge, Shimonoseki Cityin Yamaguchi Prefecture
Photo by Yuji Yoshizu
West Japan Operation Division
Coca-Cola Bottlers Japan Vending Inc.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

11

Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Governance

Financial /Corporate Information

12

Message From the President

Prioritizing structural profitability for
future growth and profitability

On the publication of the 2022 Integrated Report
The Coca-Cola Bottlers Japan Holdings Group (CCBJH

Japan experiences significant change at an acceleratingGroup) has consolidated its previous Annual Review andpace, we remain agile in adapting to these environmental

CSV Report into a single document, the 2022 Integratedchanges. Concurrently, we are committed to pursuing

Report. This comprehensive report aims to provide valuablebusiness growth and creating shared value with society

information to our stakeholders, including shareholders andthrough our unique value creation process.

investors, to foster a better understanding of our long-term

Within this integrated report, we provide an overview ofvalue creation strategy. Our goal is to promote transparency

our initiatives as a total beverage company. These include

and facilitate a deeper insight into our processes ofactions focused on ensuring the safety and reliability of ourgenerating sustainable medium- to long-term value.

products, as well as our commitment to creating shared

Our corporate philosophy, “Paint it RED! Let’s Repaintvalue (CSV). Furthermore, we outline strategies for

Our Future,” guides our mission to “Deliver happy moments

implementing a medium- to long-term value value creation

to everyone while creating value.” It serves as the basis ofapproach and attaining sustainable growth.

our daily business operations. As the beverage industry in

Calin Dragan
Representative Director, President

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

Achieving steady results: Outcomes of 2022 transformation initiatives
In 2022, the impact of COVID-19 began to subside.

activities to maximize opportunities for increased demand

Nevertheless, we were forced to steer our business throughfrom the recovery in social activities and the heat wave. As

difficult circumstances created in part by a substantial

a result, we were able to achieve growth in both sales

increase in costs arising from external factors. Against thisvolume and value share. We also revamped our Sales andbackdrop, we had to address rising raw material, supplies,

Operations Planning (S&OP) process to ensure a stableand energy prices and the impact of foreign exchange

product supply. This has significantly improved the service

rates, as well as strengthen our revenue base. As part oflevel associated with product supply in times of sudden

our pricing strategy, we revised our product prices ahead ofchanges in demand, which had previously been an issue, inothers in the industry. We implemented price revisions forturn contributing to volume growth. In addition, welarge PET bottle products in May 2022 and for small

continued to push forward with transformations that will

packaged products in October 2022. Through management

lead to future growth. This included the launch ofdecisions based on strong determination and thoroughoperations at the Akashi Mega Distribution Center (DC), theexecution in the market, we are already seeing results suchsecond of our automated distribution centers in Japan.

as an improvement in revenue per case. I believe these

Furthermore, we continued to work on optimizing ourstructural profitability improvement initiatives are vital for thebalance sheet. The key measures for future growth that we

future of the beverage industry and our business. Moreover,have been working on in each field are steadily producing

from a growth standpoint, we leveraged the growth

results. This proves to me that we are headed in the rightfoundation we built and implemented effective sales

direction in terms of strategy.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

13

Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Governance

Financial /Corporate Information

14

Message From the President

2023 to be a year of focusing on profits and prioritizing improved profitability

promote information disclosure based on Task Force on

discussions is promptly shared internally. These become the

Climate-related Financial Disclosures (TCFD)

guidelines that facilitate our sustainability activities.

In 2023, we expect the price of raw materials, supplies, anda supply chain network to realize high quality, low costs,

recommendations and participation in climate change

We also continue to promote various horizontal

energy to continue to rise. This, combined with the impact

and stable supply. Specifically, on the manufacturing side,

initiatives. In addition, we hold diverse discussions at

recycling initiatives, including “bottle-to-bottle*1,” “CAN toof foreign exchange rates, will require us to address further

we will work to promote efficiency in manufacturing

Sustainability Committee meetings among leadership-level

CAN*2,” and packaging recycling initiatives, “pallet-to-pallet*3”

cost increases. In addition to utilizing the results andprocesses and build a flexible manufacturing system.

employees from each division. Feedback from theseand “shell-to-shell*4,” to effectively utilize resources.

lessons learned to date, we will promote initiatives to

Meanwhile, on the logistics side, we will optimize ourachieve a stable and low-cost supply of products and a

distribution network by such means as ensuring stable

thorough sales strategy that emphasizes investment

operations at the Akashi Mega DC, which was opened inefficiency. We will do this by placing the highest priority on

2022. We will also focus on ensuring stability in our S&OP

improving profitability in this year of focusing on profits.

process, which was revamped in 2022. Moreover, we will

In our commercial activities, we will further improve
revenue per case through an appropriate pricing strategy
centered on price revisions. Our aim is to achieve a steadycontinue to work on achieving a timely and low-cost supplyof products in response to changes in the environment.
As for the overall business foundation, we will further*1 Collection, processing, and recycling of used PET bottles, which are then regenerated as PET bottles and used as beverage containers*2 Horizontal recycling of aluminum cans
*3 Light blue or black platforms used for transporting and storing products*4 Cases for bottle products

Promoting human capital management by strengthening our human capital strategy
I am certain that people and organizational strength

challenging the business environment, our driving force isrecovery in revenue and establish a profit structure foraccelerate the standardization of business processes andconstitute the principal foundations of our business. Throughthe desire to create value for our stakeholders and tosustainable growth. In terms of volume, we are executing

improvement of efficiency through DX. Our goal is tointegration, we have become a company where humancontinue as the preferred partner for decades to come. We

core category-focused strategies, expanding our productestablish a robust cost structure that will allow us toresources and cultures espousing various values coexist.

are committed to making great strides forward toward

portfolio based on innovation, and executing marketing

respond flexibly to any changes in the environment. Cost

We consider this a strength and are implementing various

sustainable growth and improved corporate value by

investments emphasizing effectiveness and efficiency.

pressure remains severe, but we will improve profitability bymeasures to maximize human resources value and achievedelivering happy moments to everyone while creating value.

steadily moving forward on initiatives in each area.

sustainable growth while leveraging our diversity. In addition,

Thank you in advance for your continued understanding of

we actively provide learning opportunities, such as ourand support for the CCBJH Group.

In manufacturing and logistics, we are working to build

human resources development programs for leaders who

Identifying unique material issues amid accelerating changes in the business environment

are driving change, thereby improving the capabilities of theentire organization. Moreover, to enable employees to reachIn 2019, the Coca-Cola System in Japan formulated aestablishing the Sustainability Framework and reidentified

their full potential, we have introduced compensation

Sustainability Framework that identified three platforms ofmaterial issues unique to our company. By separating thesystems that emphasize results and have established a

Inclusion, Communities, and Resources, and nine priority

identified issues into the categories of Key Themes incommendation system. We are working on various otherissues to be addressed to achieve our unique non-financial

Sustainable Value Provision, Key Themes in Sustainablemeasures as well, such as strengthening Diversity, Equity &CSV Goals.

Society, and Key Themes in Sustainable Organizational

Inclusion (DE&I) and promoting diverse work styles.

However, since establishing this Sustainability

Management and linking them to our Value Creation

We will continue to actively invest in human resources

Framework, the macro environment surrounding our

Process, we have expressed our vision in the form of adevelopment to enhance human resources value, which iscompany has changed significantly. In addition, the change

Value Creation Story.

one of our strengths and essential for the future growth ofis accelerating and heavily impacting consumer behavior

To address Mitigation of and Adaptation to Climate

our company.

and business operations. Because of this and other factors,

Change, a material issue categorized as one of the Key

We will continue to maintain high quality standards tothe business environment remains challenging and

Themes in Sustainable Value Provision, we will establish aprovide safe and secure products and services to meet theuncertain. In order to realize our mission to “Deliver happy

new Sustainability Committee in 2023. Our aim is toneeds of everyone. In addition, by providing value to various

moments to everyone while creating value,” we havestrengthen the system for establishing policies andstakeholders through our business activities, we will create

reviewed our existing material issues identified whenstrategies on climate change and other issues and toa virtuous cycle for society as a whole. No matter how

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

15

Introduction

Financial &Non-Financial Strategy

Value Creation Story

Sustainability

Risk Management

Governance

Financial /Corporate Information

16

Value Creation Process
Coca-Cola Bottlers Japan Holdings aims to realize our mission by continuously providing value forall stakeholders through our unique value creation process.

Main Capital / Strengths

Business Model and Output
Business Model

OutputPartnership with The Coca-Cola Company andCoca-Cola (Japan) Company

Beverages for Life

Input
Manufacturing &Commercial capital

Supply chain and sales foundation forthe stable supply of a varied product line

17

PlantsSales/distribution centers
Vending machines

Lineup of about 40 brands andmore than 600 products

About 700,000
Sales plan

The globally shared Coca-Cola brandand the innovation capabilities of the
global Coca-Cola system

About 225

Human capital

Diverse human resources supporting
sustainable growth and an organizational
culture that maximizes ability
Number of employees About

Production

Coca-Cola Japan’s
Value Chain

CCBJH Group’s
Value Chain

Align

Research anddevelopment

Logistics

Planning

Collection /Recycling

14,500

Sales /
MarketingSocial capital

Innovation forSociety

Measures to address issues suchas recycling, water conservation,and open innovation

13,287,000 m
Water replenishment rate 420%

3

Water usage

Financial capital

A sound and stable financial foundation
and a decisive financial structure to
realize strategic investment measures

Creating a sustainableglobal environment for
future generations

࠮Promoting businessprocess management

࠮+L]LSVWPUN0;WSH[MVYT
and DX system

࠮:\Z[HPUHIPSP[`
framework࠮Establishment of CSV
promotion structure

Mission࠮0TWYV]PUN
business resilience

࠮7YVTV[PUNO\THU
resource management

Achieving sustainable developmentof local communities throughcollaboration for regional economic
growth and community building

Platform for
Sustainable Growth

Growth platform for employees,
customers, suppliers, and otherstakeholders

Natural environment

Deliver happy
moments toeveryone while

Suppliers

creating value
Impact on operations
Achieving stable andsustainable growth in
the market

Mitigating environmental impact
by raising consumer awarenessand forming a responsible
recycling/circular society

Shareholders / Investors

Foundational initiatives

Increasing share value throughprofit growth, enhanced
shareholder returns, andthorough implementation of
corporate social responsibility

830 billion yen
A+ (R&I) / AA- (JCR)

Total assets Approx.
Rating

Impact on
the environment

Communities

About 111 million

Sustainable securing of biologicalresources, raw materials, and supplies
through conservation of natural capital

Contributing as
a partner to all
stakeholders

Achieving sustainable businessgrowth through constructive
relationship building

35 prefectures

Natural capital

Impact on society

Employees

Tokyo, Osaka, Kyoto andConsumers insales area

Customers (Consumers)
Fostering wellness by providing
high-quality products andservices that enrich daily life alongwith new occasions to enjoy
beverages and refreshments

Improving engagement throughsystems and work environmentsthat facilitate employee growth
to reach their full potential, as
well as through the formation ofautonomous organizations

Collaboration and engagement withstakeholders, including local communities
and customers, to solve social issues

Sales area

ImpactContributing to the creation of
economic, social, andenvironmental value for customers
through expansion of business
opportunities and collaboration

Marketing

The Coca-Cola
Company

Outcomes

Ideal Image

Business partners

Procurement

Beverage
base
production

About 40

Bottling partners
worldwide

Beverages in tune with people’s
life and daily living

About 300

Intellectual capital

Brands in Japan

Value to Stakeholders

As of December 31, 2022

Key Themes in Sustainable Organizational Management

CCBJH Group’s Material Issues(Go to page 20)

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

and Safety ࠮ Resilience to Natural Disasters ࠮ Corporate Governance࠮ Product Quality
࠮ Sustainable Supply Chain ࠮ Responsible Commercial Practices

࠮Key Themes in Sustainable Value Provision࠮Packaging and Recycling (Circular Economy)
Mitigation of and Adaptation to Climate Change
Employee Development & Wellbeing

࠮

Key Themes in Sustainable Society࠮ Water Stewardship࠮ Healthy Products / Services ࠮ Contribution to Local Community Development
࠮ Sustainable Conservation of Biological Resources ࠮ Diversity, Equity and Inclusion
Coca-Cola Bottlers Japan Inc. Integrated Report 2022

17

Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Governance

Financial /Corporate Information

18

Process for Identifying Material Issues
As part of Coca-Cola System in Japan’s Sustainability Framework, we are committed to pursuing activities that
address social issues through creating shared value (CSV). To further advance our efforts and fulfill our mission,
we have identified our material issues for 2023.

STEP

1

Recognizing the current status

STEP

2

Identifying material issues

Further adaptation is required to changes in the social environment while promoting the Sustainability Framework

Gaining New Perspectives: Identifying material issues through analysis, surveys, and evaluation

In 2019, the Coca-Cola System in Japan established its
Sustainability Framework, which outlines three platforms Inclusion, Communities, and Resources - and nine key issues
to be addressed. Despite our ongoing efforts to promote
activities based on this framework, it has been four years since
its formulation and the macro environment continues to evolve.
These include changes to the global economy, geopoliticalrisks, a declining birthrate and aging population, and climatechange. Additionally, the recent COVID-19 pandemic, risingIn identifying material issues, we first revisited the agreed
Coca-Cola System Sustainability Framework for Japan. We
then conducted a social axis evaluation based on ESG reports,
NGO reports, industry reports, media analyses, etc. Thisevaluation was used to identify topics of social attention andimportance, from which a list was made of items to be added
as material issues.
The listed items were surveyed for their degree ofimportance. Based on the results of this survey, they weregrouped and organized, social axis evaluation was conducted,
and we drafted a proposal of what our material issues should
be. The project team conducted an internal evaluation by

raw material and energy prices, and the weak yen have had amajor impact on consumer behavior and business. This has led
to sustained uncertainty and challenges in the businessenvironment, making forecasting increasingly difficult.
To fulfill our mission of delivering happy moments toeveryone while creating value, we have established agroup-wide, cross-divisional project team to identify ourmaterial issues in response to these changes.

analyzing documents such as the Annual Review and the CSV
Report. This evaluation checked the materiality proposal forcomprehensiveness and appropriateness, and the team thendiscussed the proposed definition of material issues. Based onthese discussions, we have identified and defined 13 material
issues unique to our Group, covering three categories of“environmental,” “social,” and “governance.”
The importance of the 13 material issues was scored byinterviewing ESG-related investors, NGOs, local governments,and our management team, including the CEO, as well as byconducting employee surveys. This information was used toplot a materiality map of importance levels.

The Sustainability Framework for the Coca-Cola System in JapanThe Coca-Cola System in Japan has identified 189 issues fromvarious sources such as SDG-related reports and guidelines,
benchmark surveys by outside consultants, stakeholder interviews
with consumer groups, retailers, NPOs, academic groups, and
ESG investors, ISO 26000, and government agency reports. Theseissues were then narrowed down to 33 based on common sharedcategories such as renewable energy and aging society. We thenspecified 15 issues that were highly relevant to both society andour business.
Through interviews and workshops with management andemployees of Coca-Cola Japan and Coca-Cola Bottlers Japan, four
key issues were identified. Further discussions on the 19 total key
issues led to a common framework that specified three platforms Inclusion, Communities, and Resources - and nine key issues.

Three platforms and nine priority issues

Priority
Topics

Focus
TopicsInclusionCommunities

Resources

Gender࠮ Drive impact throughtwo national platforms(Inclusion, Resources)

Packaging/PET

Age/Generation
Disabilities
LGBTQ࠮ Initiatives that are
sustainable andadditionally have local
relevance

Water

1

Organization andidentification of issue items• Identifying topics of social and industry attention and importance• Listing of items to be added as material issues

2

Drafting of a proposal formaterial issues

3

Selection and definition of
13 material issues• Conducting importance surveys on existing and additional issues• Grouping issues and reorganizing the issue list based on issue granularity• Conducting social axis evaluation in accordance with issue granularity,
drafting a proposal for material issues• Organizing and preparing a proposal for material issues and their proposed
definitions through internal evaluations, including analysis of our data
• Discussing issue granularity and definition within the project team
• Selecting 13 key material issues across three categories:
Environmental, Social and GovernanceGreenhouse gas emissions
Renewable energyof material issue
4 Scoring
importance

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

• Confirming and organizing existing issues being addressed by
the Coca-Cola System in Japan• Conducting interviews with stakeholders• Conducting interviews with management including the CEO and employee surveys• Scoring importance for the preparation of the proposed map of material issues

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

19

Introduction

3

Organizing material issues

Very
high

Key Themes in
Sustainable Society

Key Themes in
Sustainable Value Provision࠮Packaging and Recycling (Circular Economy)
Mitigation of and Adaptation
to Climate Change
Employee Development &Well-Being
Contribute to Local
Sustainable
Community Development
Conservation of
Water Stewardship
Biological Resources
Diversity, Equity
Responsible
and Inclusion
Commercial Practices
Corporate Governance
Healthy Products/
Services࠮Sustainable
Supply Chain

Product
Quality and
SafetyHigh

Our own material issues are based on the key issues identified in
the Sustainability Framework and the 19 key issues selected during
the framework’s formulation process, to which topics to be added
as material issues were also incorporated. These were evaluatedand material issues were identified, then classified in connection to
three platforms: Inclusion, Communities, and Resources. This
enables us to ensure consistency between our sustainability

Importance for the CCBJH Group

Go to page 51

Mitigation of and Adaptation
to Climate Change

To mitigate and adapt to climate change, we aim to reduce our environmental impact throughinitiatives throughout the value chain, including the reduction of our greenhouse gas emissions.

Go to page 53

Employee Development &Wellbeing

We believe that employees are important assets in conducting sustainable business. Therefore,in our human resource development system, we work to create a workplace environment thatmaximizes and develops the potential of each employee. We focus on our employee’s safety
and their physical and mental well-being by measures such as enhancing their work-life balance.

Go to page 35

20

Key Themes in Sustainable Society
Water StewardshipAs a company whose main product ingredient is water, we strive to reduce, reuse, and properly
treat water used in manufacturing. We also work with local communities to conserve water
resources in a sustainable manner to pass on abundant water resources to future generations.

Go to page 53

Sustainable Conservationof Biological Resources

We conserve biodiversity and achieve sustainable business by recognizing and reducing theimpact on the natural environment and ecosystems whilst making business decisions.

Go to page 48

Healthy Products/Services

We contribute to consumer wellness by providing high value-added products and services that
contribute to the maintenance and promotion of health and nutrition.

Go to page 61

Diversity, Equity andInclusion

We foster a culture that respects human rights, diversity, and fairness, and create anenvironment where each individual can maximize their abilities regardless of gender, age,disability, race, nationality, sexual orientation, gender identity or expression, or other attributes
throughout the value chain.

Go to page 43

Contribution to Local
Community Development

Based on collaboration and communication with local communities and other stakeholders, we
engage in activities aimed at developing sustainable local communities and solving social issues.
Through our business, we contribute to the revitalization of local economies.

Go to page 47

Very highactivities and the key issues of the Coca-Cola System in Japan, as
well as our own material issue areas—Key Themes in Sustainable
Value Provision and Key Themes in Sustainable Society.
Furthermore, the Key Themes in Sustainable Organizational
Management, common to all three platforms, have been
established as the foundation for our organization’s management.

Inclusion
Gender
Age/Generation
Disabilities
LGBTQ

Communities• Drive impact through two national
platforms (Inclusion, Resources)• Initiatives that are sustainable andadditionally have local relevance

Resources

Key Themes in Sustainable Organizational Management
Product Quality
and Safety

In order to provide safe, high-quality, fresh, and refreshing products and services to ourconsumers, we implement strict quality systems and processes in all business processes,
from raw material procurement, manufacturing, distribution and transportation, to sales andservice. In this way, we guarantee and improve the safety and quality of our products.

Go to page 63

Resilience to
Natural Disasters

We strive to build a system and structure that is safe and robust enough to minimize the impact
on our business in the event of any injury to employees and damage to facilities for
manufacturing, logistics, sales operations, and business sites caused by large-scale natural
disasters such as earthquakes and typhoons.

Go to page 62

Corporate GovernanceWe strive to build and maintain a strong corporate governance structure to improve
management soundness and maximize corporate and shareholder value. In accordance with
the intent of the Corporate Governance Code, we strive to improve the skill sets of ourdirectors and all employees, pursue an optimal organizational design for our company, andfurther strengthen our governance.

Go to page 69

Sustainable Supply Chain

We build a sustainable supply chain through the stable procurement of materials and raw
materials, addressing human rights and environmental issues in the supply chain, conducting
appropriate transactions and responsible procurement.

Go to page 33

Responsible Commercial
Practices

We build our relationships with our consumers by ensuring responsible marketing of our full
beverage portfolio, including alcohol, ensuring compliance with all commercial activities in line withlaws and regulations. We provide our stakeholders with access to useful and sufficient informationon the health and nutrition of our products through easy-to-understand communications.

Go to page 25

Packaging/PET
Water
Greenhouse gas emissions
Renewable energy

Key Themes in
Sustainable Value
Provision

Employee Development& Well-Being—

Packaging and Recycling(Circular Economy) /Mitigation of and Adaptation
to Climate Change

Key Themes in
Sustainable Society

Diversity, Equity
and Inclusion

Healthy Products and Services /Contribute to Local Community
Development

Water Stewardship /Sustainable Conservationof Biological Resources

Key Themes in Sustainable
Organizational Management

Product Quality and Safety / Resilience to Natural Disasters / Corporate Governance
Sustainable Supply Chain / Responsible Commercial Practices

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

Financial /Corporate Information

To achieve the Coca-Cola Company’s 2030 Global Vision World Without Waste, we will workon activities such as light-weighting, horizontal recycling, and waste reduction through thethree pillars of design, collection, and partnerships. By doing so, we contribute to thepromotion of recycling of plastic and other materials in Japan.

Relationship between the Sustainability Framework and our own material issues

The CCBJH
Group’smaterial issues

GovernancePackaging and Recycling(Circular Economy)

Resilience to Natural Disasters

Key Themes in Sustainable
Organizational Management

Focus Topics

Risk Management

Key Themes in Sustainable Value Provision

Map of material issues

Importance for stakeholders

In mapping our material issues, for the social axis we scoredimportance for stakeholders based on factors such as
interviews with outside experts and analysis of various reports.
For the business axis, we scored importance for the CCBJHGroup based on interviews with management and employee
surveys. The resulting scores were plotted along the axis ofimportance for stakeholders and for the CCBJH Group to
create a map of material issues. We then classified the material
issues in the upper right of the map as Key Themes in
Sustainable Value Provision, those in the upper left as Key
Themes in Sustainable Society, and those in the lower right as
Key Themes in Sustainable Organizational Management.

Priority Topics

Sustainability

The CCBJH Group’s material issues and definitions

Mapping material issues based on importance to stakeholders and the CCBJH GroupThe Coca-Cola
System in Japan

Financial &Non-Financial Strategy

Material Issues

Process for Identifying Material Issues

STEP

Value Creation Story

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

21

Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Governance

Financial /Corporate Information

22

Part 2Financial &Non-Financial Strategy
23

Message From the CFO

25

Commercial Strategy

27

Initiatives by Channel

29

Initiatives by Category

31

SCM Strategy

33

Procurement Strategy

35

People Strategy

Kokura Castle, Kitakyushu City
in Fukuoka Prefecture
Photo by Wataru Tanigawa
West Japan Operation Division
Coca-Cola Bottlers Japan Vending Inc.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

23

Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Governance

Financial /Corporate Information

24

Message From the CFO

Enhancing corporate value:
Building a stronger business foundationand improving profitability
Bjorn Ivar Ulgenes

just 200 million yen over the previous year. Despite thechallenging circumstances, our initiatives aimed at building astrong learnings foundation and achieving low-cost
operations produced steady results. For the areas under ourcontrol, we were able to achieve a roughly 20 billion yen
improvement in profit, which is a noteworthy achievement.

Placing the highest priority on improving profitability as we pursue a thoroughcommercial strategy and achievement of a stable, low-cost product supply in 2023

Representative Director and Vice President, CFO

Initiatives for building our revenue baseand achieving low-cost operations areyielding results
In 2022, although there were increased demand opportunities
with the recovery in traffic and the hot summer, the businessenvironment remained challenging. This was because of
external factors, mainly a significant increase in the costenvironment. In such circumstances, we positioned 2022 as ayear to build a foundation for sustainable growth. We focused
efforts on strengthening our earnings foundation andachieving low-cost operations.
For commercial activities, we launched new products andstrengthened our response to diversifying consumer needs.
While we implemented measures to grow volume, we also
worked to improve profitability. As part of our profitability-focusedpricing strategies, we revised the shipping prices of large PET
bottle products in May and the suggested retail prices ofsmall package products in October.
In the areas of manufacturing and logistics, we have beenworking to establish a system that can flexibly respond tosudden changes in demand to realize a stable product supply.
To achieve this, we revamped our Sales and Operations
Planning (S&OP) process. Additionally, in July 2022
operations started at our new automated Akashi Mega
Distribution Center (DC), which has one of the largest storage
and shipment capacities of the Coca-Cola System in Japan.
Together with the Saitama Mega DC, which began operationsin 2021, it will focus on stable operations to improve ourlogistic network, which is a basis for our sustainable growth.
We also worked on initiatives to develop a supply chainorganization that can ensure high-quality products at thelowest cost.
Despite short-term volume declines due to the pricerevisions, our sales volume in 2022 grew strongly, increasing
by 3% from the previous year. This was a result of oureffective commercial activities that captured growth
opportunities from the recovering traffic. Revenue increasedby 2.7% year-on-year to 807.4 billion yen owing to volume
growth and improved wholesale revenue per case through the

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

price revisions. Although profitability benefited from increased
sales revenues and cost reductions through transformationand other measures, external factors such as rising commodityand energy prices as well as the impact of foreign exchange
rate fluctuations increased the cost burden by 19.9 billion yen
and put significant pressure on profits. As a result, ourbusiness income loss was 14.4 billion yen, an improvement of

In 2023, we anticipate the continued pressure from rising costs
due to external factors. However, we will leverage theachievements and learnings from 2022 and place top priority
on improving profitability. Our key measures include additional
price revisions in May for can and large PET bottle products,
implementing a comprehensive commercial strategy focusedon profitability and investment efficiency, and furthertransformation to achieve stable, low-cost operations.
Although price revisions are expected to have a negative
impact on sales volume, we are targeting a 4.9% year-on-year
revenue increase to reach 847.1 billion yen. We willaccomplish this by capturing increased demand opportunities
from traffic recovery, as well as implementing the third pricerevisions since 2022. Business income, although we are
implementing various initiatives, including price revisions, we
expect a loss of 5 billion yen due to rising commodity andenergy prices as well as foreign exchange rate fluctuations.

However, we target about a 10 billion yen improvement inbusiness income, that will be supported by the earnings
improvement through revenue growth.
In 2023, we can expect a certain level of growth in thebeverage market in terms of value, including the effect of our
price revisions and those of other companies. Based on theseassumptions, we will implement various measures to provide
value to customers. While we will make efforts to thoroughly
capture demand and carry out commercial activities with anemphasis on profitability and investment efficiency, including
price revisions. We will closely monitor market trends after
implementing price revisions and respond as necessary toensure the success of our initiatives. On the cost side, we willcontinue to move forward with transformation initiatives inmanufacturing and logistics area to achieve 3.3 billion yen incost savings. We will continue to review our cost structure toensure sustainable growth over the medium to long term.

Strengthening our business foundation emphasizing investment for
growth and good stewardship of capital
We are focused on investments that will promote growth andgood stewardship of capital to create shareholder value. To
achieve growth, we will continue to invest in key transformation
initiatives that will drive growth in the medium to long term. At thesame time, we will carefully manage the total capital investment
amount to reflect the current business environment and cash
levels. In 2023, we plan to reduce our capital investment by 1.9
billion yen from the previous year to a total of 37 billion yen.
We are committed to being good steward of capital,
which has led us to divest non-essential assets that emerge inthe process of transformation. Additionally, we have been
gradually reducing cross-held shares in accordance with the
Corporate Governance Code. In 2023, our commitment tosound capital management will remain a top priority. This willentail maintaining a strong financial structure, prioritizing
capital allocations, ensuring appropriate cash flows, executing
capital investment with an ROI focus, and stable dividends.
To achieve sustainable growth, we believe that investingin marketing efforts to build a strong foundation for market
share growth is essential. Additionally, we aim to establish a

flexible cost structure that enables to quickly adapt tochanges in the business environment. We plan to further
standardize business processes and leverage DX as the
improvement of the balance sheet is important from theperspective of good stewardship of capital.
We will strive to maintain stable dividends and in the future,
aim to improve shareholder value in line with growth. We will
explore all options that will lead to an increase in shareholder
returns. In 2023, we plan to pay an annual dividend of 50 yen
per share, which is the same as the previous year.
Since our integration in 2017, we have undertaken
various financial initiatives, including stable dividend
payments, share buybacks, and corporate bond issuance,with the goal of improving shareholder value. We continue to
optimize the balance sheet to achieve this objective. Although
the difficult business environment is expected to continue in
2023, we are committed to further transform our business.
We will work to strengthen the agile and resilient businessfoundation and continue our efforts to improve profitability
that will lead to enhance corporate value.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

25

Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Governance

Financial /Corporate Information

26

Commercial Strategy

through strategic growth partnerships with our business
partners. We achieved the most significant sales growth in the
online channel. This was due in part to the expansion oflabelless products lineup against the backdrop of changing
consumer behavior amid the COVID-19 pandemic.
In addition, we revised the prices of large PET bottle
products in May, ahead of others in the industry, and of small
packaged products in October the same year. We did this in

Promotinga profitability-focused strategy
with four pillars
Costin Mandrea
Executive Officer and CCO (Chief Commercial Officer)
Coca-Cola Bottlers Japan Inc.

order to strengthen our revenue base, as well as address rising
raw material and energy prices along with the adverse impactof foreign exchange rates. It was a difficult decision to make ina severely competitive environment. However, decisive
management based on strong determination and thoroughexecution in the market have produced results, contributing
significantly to increased revenue per case and higher profitability.

Aiming to restore revenue and establish a sustainable profit structure based on the four pillars
In 2023, we are promoting commercial activities based on thefour pillars of our commercial strategy: Expand Portfolio,

Growth Through Vending Channel, Profitability-Focused Pricing,and Strong Market Execution.

Four pillars of the 2023 commercial strategy

Transformation and initiatives to strengthen the growth foundation produce revenue growth
and an increase in value share
In 2022, as the beverage industry as a whole benefited from a
recovery in social activities, we steadily implemented key
transformation measures to maximize sales, improve efficiency,
and reduce costs while rebuilding our foundation for growth. In
addition, we continued to promote DX, develop the skills of sales
representatives, and transform commercial operations, actively
investing while considering effectiveness and efficiency.
Furthermore, by deepening cooperation between thecommercial and supply chain divisions, we worked to build aprocess to ensure a stable supply even in the face of rapid
growth in demand. The effects of revamping our Sales andOperations Planning (S&OP) process, which has been aparticular focus, have begun to manifest. We were remarkably
successful in capturing demand. As social activities resumed,
we responded to the surge in demand by working closely withour business partners during the scorching peak summer
season. We also minimized lost sales opportunities resulting
from product shortages.
On the product side, we have continued to strengthen ourbrand and introduce new targeted products. We worked on

Expand Portfolio

implementing appealing campaigns and strengthening in-store
promotional activities for brands such as Coca-Cola, Aquarius, I
LOHAS, Georgia, Costa Coffee, and Yakan no Mugicha from
Hajime. As a result, we achieved sales growth that exceeded our
initial plan. In addition, the new Georgia ZERO series andYowanai Lemon-dou achieved their sales volume targets.
Overall, we implemented win-win collaborative measureswith major business partners across channels to strengthen
relationships. In the vending channel, we increased the numberof vending machines in operation by more than 10,000 units
from the previous year, and we grew Coke ON, the official
Coca-Cola app, into a solid platform that has been downloaded
more than 45 million times (as of March 2023). These efforts
have all contributed to ongoing value share growth. In the OTC
channel, such as supermarkets, we have been working torevitalize sales floors and strengthen product distribution to
mitigate the impact of lower sales volumes following pricerevisions. In the retail and food service channel, we achieved astrong recovery by seizing the increasing opportunities inrestaurants created by the resumption of social activities

Sales volume (2022 results)
Online4%Supermarket

24%

Retail & Food

17%

Vending23%

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

ChannelDrugstore &Discounter17%

Convenience Store

14%

Juice

6%

Sparkling25%

Coffee

20%

Water

12%

CategoryTea

24%
Sports9%Growth ThroughVending Channel

ҋ Focus on core categoriesof sparkling, coffee, tea,
and water to increasepresence in each category

ҋ Maximize sales permachine by leveraging
Coke ON and strengthened
the product lineupҋ Introduce sustainable
innovation to the market

ҋ Increase the number of units
in operation by installing in
high-quality locations

ҋ Capture changing
consumer needs fordifferent occasions

Profitability-Focused
Pricingҋ Implement the May 2023
price revisions
ҋ Ensure profitability-focusedcommercial activities, andmonitor efficient use of
marketing investments

ҋ Improve operational
efficiency further through DX

Strong Market
Execution
ҋ Cross-functionalcommercial structure tostrengthen customer
engagement
ҋ Further advance S&OP
process to achieve higher
service levels
ҋ Collaboration with
Coca-Cola Japan toleverage our strength as
Japan’s Coca-Cola System

Focusing on seizing opportunities for further growth and executing
a profitability-focused commercial strategy
In 2023, we are implementing a profitability-focused commercial
strategy based on the results and lessons learned from 2022.
To expand our portfolio, we are focusing on the core categoriesof sparkling, coffee, tea, and water. We are also developing
appealing new products, utilizing our proprietary technology,
such as Aquarius New Water and Kocha Kaden Dessert
Torokeru Peach Tea, along with Jack Daniel’s & Coca-Cola in
the alcohol category. In addition to marketing activities at thetime of launch, we are focusing our attention on productproposals tailored to new drinking habits. These proposals aredesigned to seize opportunities presented by the resumption ofsocial activities.
As social activities resume, the vending channel will become
an increasingly important commercial channel. In 2023, we areleveraging the growth foundation we have built to engage in new
installation activities, enhance product lineups. Moreover, we areworking on further DX projects and improving the user
experience through Coke ON as well as increasing efficiency by

performing sales person operations online.
As part of our profitability-focused pricing strategy, we
implemented price revisions in May of this year. This was on theheels of revisions carried out last year. The revisions were carriedout in response to cost increases arising from external factors andto strengthen our revenue base. We will also strive to thoroughly
implement profitability-focused commercial activities andmarketing investments emphasizing effectiveness and efficiency.
As for market execution measures, we will strengthen
relationships with our business partners by conducting multifaceted
customer management through a cross-functional commercial
system. We will also work to further enhance our S&OP process tomeet the needs of our customers and business partners throughthe stable supply of products and improvement of service quality.
Aiming to become a healthier and more profitablecompany, we will execute profitability-focused commercial
activities as we continue to deliver happy moments tocustomers and business partners.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

27

Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Governance

Financial /Corporate Information

28

Initiatives by Channel
We deliver our products to customers through various commercial channels.
In each commercial channel, we conduct fine-tuned sales activities, including
thorough lineup consideration and sales methods tailored to the specific sales spaces.

Vending (Vending Machines)

Supermarkets, Drugstores, and Discounters

The vending channel is a retail channel through which we sell products directly to consumers
through our approximately 700,000 vending machines.

Our wholesale channel delivers products to consumers throughproduct sales in-store and the creation of appealing sales spaces.
We are working on proposing optimal product lineups and sales spaces in stores based on
consumer insights and developing promotions that go along with different seasons and events.
In 2022, we worked with our business partners to revitalize their sales floors through sales
floor development and rolling out campaigns tied to Soccer World Cup. In addition, in an effort togrow demand, we developed 350ml PET and 700ml PET bottle products for different customer
drinking opportunities and worked on strengthening sales by the case for the growing demand forhome consumption.
In 2023, in addition to 350ml and 700ml PET bottles, which are selling well, we arestrengthening sales of small cans (160ml cans) and other products. At the same time, we arestrengthening the development of labelless products, which are being expanded through the online
channel. These efforts are a part of our attempts to enhance our sustainability initiatives.

We are working daily to improve the vending experience by installing new machines according to theever-changing flow of people, effectively introducing new and core products, as well as exclusive
drinks. This ensures an assortment that reflects the character of the installation location. We also
implement effective marketing using the official Coca-Cola app “Coke ON.”
Furthermore, we are engaged in commercial activities leveraging artificial intelligence (AI) andbig data as part of our efforts to grow sales and streamline vending operations. On top of this, weare executing measures such as taking vending machines online to help improve the frequency ofvisits to vending machines.

Providing an appealing buying experiencethrough Coke ON—Now downloaded
more than 45 million times“Coke ON” is an official Coca-Cola smartphone app that is both greatvalue and convenient. Users can earn free drinks by collecting
stamps through the app. Since its launch in April 2016, the app has
added functionality while meeting changing consumer needs.
We are endeavoring to provide an appealing buying experience.
This includes Coke ON Pay which supports various payment
services, campaigns where customers can get additional drink
tickets, and a collaboration with a popular game that has been goingon since December 2022.

Service enhancement andnumber of downloads

2016

2018

LaunchConvenience Stores
Convenience stores are a wholesale channel that allows us to deliver goods to consumers throughsales to partner stores and sales floor development to help increase consumer demand.

Just a year after surpassing 30 million downloads in 2021,
the number of downloads increased by more than 10 million toreach 43 million in 2022 and 45 million as of March 2023. This
growth is helping to increase customer engagement with our
products and vending machines. Looking ahead, we will continue toprovide appealing services and expand functionality.

Retail and Food Service
March 2023

December 2022
2019

10 million 15 million

2021

October 2022

30 million 40 million

43 million

45 million

2019
Collect stamps for e-money transactions with Coke ON IC

2018
Walk and get drinks with Coke ON Walk

2021
Drink subscription service Coke ON Pass

Pay easily without cash with Coke ON Pay

2022
e-money for vending machines Coke ON Wallet

https://c.cocacola.co.jp/app/walk/https://c.cocacola.co.jp/app/pay/

Retail and food service is a wholesale channel in which we sell products to business partners such as operating stores, restaurants,
liquor shops, and other stores, and offer consumers products and opportunities for enjoying consumptions of our products.
Against the backdrop of a recovering restaurant market, in addition to strengthening collaboration
with our business partners, we are striving to conduct effective commercial activities by developing
dispensers* and packaged products according to their business types and stores. We are also
working to capture new demand by collaborating with food delivery companies and developing
various digital promotions.
* Machine for mixing syrup and other raw materials to make products

2016
Savings and convenience with Coke ON
https://c.cocacola.co.jp/app/

In 2022, we captured new demand by strengthening the development of 900ml PET products for drinking
occasions and expanding sales of the Costa Coffee and Ayataka Café series of high value-added products.
In 2023, we are strengthening strategic planning activities based on analysis of customer
purchasing behavior, our aim being to return to a growth trajectory. We will do this by rolling out new
products that meet diverse needs and products exclusive to partner chains as well as by implementing
cross-channel digital promotions where customers can collect stamps by scanning the barcodes of
products purchased at convenience stores with the Coke ON app.

https://c.cocacola.co.jp/app/ic/

https://c.cocacola.co.jp/app/pass/

https://c.cocacola.co.jp/app/wallet/

Details of the Coke ON app
https://c.cocacola.co.jp/app/

OnlineOnline serve as a channel through which we deliver products directly to consumers,
while marketing efforts are conducted through our customers’ websites.
In 2022, online achieved a high sales growth rate. As the online shopping market grew rapidly amid
the COVID-19 pandemic, our efforts to improve the operations included adjusting the number of
products manufactured exclusively online and optimizing warehouse inventory for our business
partners to eliminate out of stock products. This was in addition to stepping up efforts to develop
labelless and other products.
In 2023, we aim to build a highly profitable business model together with our business partners.
This will entail maximizing promotional activities linked to advertisements on online shopping
websites and creating optimal sales spaces with rich content* that will lead to increased consumer
demand. Moreover, as part of our efforts to strengthen sustainability initiatives, we will further expand
labelless products with the aim of reducing plastic waste. We will also work on reducing CO2
emissions by strengthening sales of products with higher delivery efficiency.
* Images that evoke drinking scenes

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

29

Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Governance

Financial /Corporate Information

30

Initiatives by Category
We aim to deliver value to our customers and grow our sales by creating optimal portfolios in our various
categories, such as sparkling, tea, and coffee, as well as in the alcohol segment.

Sparkling
In the sparkling category, we are working to increase
revenue by developing packaging sizes that address theneeds of the increasing number of small households, seniorcitizens, and singles in addition to introducing new products.
During 2023, in the Coca-Cola brand, we will be

Coffeerevitalizing the brand with the introduction of the new
Coca-Cola Zero Peach, the Coke & Meat! campaign, andmusic-based promotions. We are also expanding the Fanta
Premier series product lineup, which is manufactured using
our proprietary aseptic filling technology.

Tea
In the tea category, Yakan no Mugicha brand, which we
introduced in 2021, has performed particularly well and has
grown into a key product contributing to increased sales.
In 2023, we are focusing on strengthening our existingcore brands and introducing innovative new products toprovide new value to our customers. In addition, we
enhanced the product lineup in the Ayataka Café series
with the introduction of Ayataka Café Teapot Coffee Latte

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

We aim to increase our sales and market share with a
two-brand strategy centering on Georgia and Costa Coffee.
In March 2023, we revamped the Georgia brand. In
particular, in the Georgia Japan Craftsman series, we
introduced new products Georgia The Black, Georgia The
Latte, Georgia The Bito, and Georgia The Zero withimproved taste and fragrance to revitalize the packaged
coffee drink market and have improved sales.
In addition, in Costa Coffee, our premium productsthat allow you to easily enjoy a hand-brewed taste
affordable premium product, we launched the new Costa
Coffee Flat White in March and revamped Costa Coffee
Premium Latte and Costa Coffee Premium Black to takethe product to the next level in terms of authentic café
quality taste. We are also developing products for various
drinking occasions, including the introduction ofconcentrated drinks and carton packages for at-homeconsumption demand.

Alcoholwith a hint of hojicha and Ayataka Café Teapot Coffee Black
with a hint of matcha. In the black tea category, we will
introduce Kochakaden Dessert Torokeru Peach Tea, agelatin-like product made with our proprietary aseptic filling
technology, to establish a new genre in the black tea
market and improve profitability by launching highvalue-added products.

We are enhancing our lineup by introducing new products
corresponding to changing consumer needs and are
stepping up our efforts to acquire sales floor space inpreparation for the demand season.
In 2023, which marked the fourth year since its
nationwide launch, we strengthened sales of the premium
lemon sour Lemon-dou by conducting a promotional
campaign as the official partner of the Japanese National
Baseball Team. In April, we launched new flavor Sukkiri

Lemon for Lemon-dou and non-alcoholic beverage
Yowanai Lemon-dou to acquire sales floor space andexpand sales.
We are also expanding our portfolio with the launch ofJack Daniel’s & Coca-Cola, the first alcoholic product tobear the Coca-Cola brand. With Lemon-dou and Jack
Daniel’s & Coca-Cola, we will ramp up our sales activities
year-round.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

31

Introduction

Financial &Non-Financial Strategy

Value Creation Story

Sustainability

Risk Management

Governance

Financial /Corporate Information

32

SCM Strategy

Addressing the diverse needs of our customers and business partners by coordinatingwith the Commercial Division

Accelerating supply chain
reform to promote stable,
low-cost product supply

We are working to ensure a stable supply of high-quality
products at low costs in every area of our supply chain. As for
supply planning, we have developed a new Sales andOperations Planning (S&OP) process in collaboration with theCommercial Division to improve demand forecasting accuracy,
accelerate decision-making based on scenario planning, andoptimize costs throughout the supply chain. In manufacturing,
we are working to increase production capacity throughmaintaining high quality, flexible, high-mix manufacturing in

Andrew Ferrett
Executive Officer and CSCO (Chief Supply Chain Officer)
Coca-Cola Bottlers Japan Inc.

Our manufacturing and distribution sites

small lots, the launch of a new line equipped with cutting-edge
technology at the Ebina Plant, and improvement activities, all ofwhich we are tying into maintaining a stable supply.
Moreover, in our DX initiatives, we effectively utilize our coresystems for rapid analysis, reporting, and decision-making
based on timely and accurate data. We will work on further DX
projects to promote automation and to build systems andprocesses that allow us to supply safe and high-quality
products in a stable manner and at a low cost.

Details of the list of business locations
https://en.ccbji.co.jp/corporate/locations/plant.php

Akashi Mega DC

Hakushu Plant (Yamanashi Prefecture)
Saitama Plant (Saitama Prefecture)(Hyogo Prefecture)
In operation since July 2022

Saitama Mega DC

Striving to improve all kinds of productivity, based on the eight core elements of the SCM strategy
The Supply Chain Management Division is responsible forformulating and executing strategies for the CCBJH Group’s
supply chain. We manufacture, distribute and sell products, and the
supply chain represents an important foundation of our business.
At the SCM Division, we have set forth eight core elements
within our strategy and are building a lean and efficient supply
chain system to deliver safe and high-quality products tocustomers and business partners at low cost. We will continue toplace the eight core elements of our strategy at the center of ouractivities. Our focus will be on the five key points of developing

Eight core elements of SCM strategy

human resources through improvement activities and promoting
diversity; consolidating inventories by utilizing automateddistribution centers (mega DCs) and improving our supply
network; facilitating the flow of delivering products to customers
and suppliers; rapid reporting and decision-making through theuse of a common core system; and thoroughly reducing costs
by further evolving our improvement activities. We will improve
productivity of all kinds and steadily generate results from ourpast activities, tying that into growth accompanied by profits.

Iwatsuki Plant(Saitama Prefecture)
Ibaraki Plant(Ibaraki Prefecture)

Akashi Plant(Hyogo Prefecture)

Kiyama Plant (Saga Prefecture)
Tosu Plant (Saga Prefecture)
Kumamoto Plant(Kumamoto Prefecture)
Ebino Plant(Miyazaki Prefecture)

17

Plants2

Tama Plant (Tokyo)
Tokai Plant (Aichi Prefecture)
Kyoto Plant (Kyoto Prefecture)

New line at Ebina Plant
In operation since April 2023

Mega DCs

We will implement thorough risk management routines and deliver
improvements in quality.

2 Safety & Capability

We will carry out Kaizen based on the OE Certificate Program* for thesafety of each individual and enhancement of their capabilities.

Promoting cost reductions by simplifying our logistics network

3 Collaboration with

We will work closely with Commercial Division and flexibly respond tothe market.

4 Agile Logistics

We will create agile and flexible logistics through the full operations ofMega DCs, reduced logistics costs, and optimized business sites.

5 Flexible Manufacturing

We will build flexible manufacturing by strengthening productivity andproduction capacity.

6 End to End Integration

We will leverage digital technologies for the end-to-end integration andrealize lean inventory and replenishment planning.

7 Optimized Sourcing

We will optimize the procurement of various essential resources
necessary for our business operations.

8 Future Products

We will provide added value through new technological solutions andoptimized packing.

We are working on improving productivity by implementing asimple and efficient structure for our logistics network, including
all processes up to the delivery of products to our customers
and business partners. In 2021, we launched operations at our
Saitama Mega DC, followed by our Akashi Mega DC in 2022.
We are building a system capable of efficient and stableproduct supply by consolidating inventories stored at sales
centers into mega DCs to give us greater flexibility in productsupply, promoting optimal allocation of product inventories, andconsolidating distribution centers. While restructuring ourdistribution network, we are also working on improving
transportation efficiency by reducing transport distances
through local production for local consumption initiatives and* An abbreviation for Operational Excellence (OE) Certification Program: A program for developing human resources while
promoting improvement activities and creating new value

Ebina Plant (Kanagawa Prefecture)

Daisen Plant (Tottori Prefecture)
Hiroshima Plant (Hiroshima Prefecture)
Komatsu Plant (Ehime Prefecture)

1 Active Quality

Commercial Division

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

Zao Plant(Miyagi Prefecture)(Saitama Prefecture)
In operation since February 2021

reducing truck waiting times through the use of digital tools andsystem management.
Going forward, we will optimize our distribution network
further and investigate new means of transportation, as weseek broad-ranging improvements in distribution efficiency,
including effectively utilizing our assets and coordinating withpartner companies.
We are also working on improvement activities throughout
the supply chain to enhance productivity. Systematically rollingout improvement activities has presented us with meaningful
opportunities not only to increase efficiency and reduce costs
but also to develop human resources. We will continue to levelup and carry out these activities.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

33

Introduction

Financial &Non-Financial Strategy

Value Creation Story

Sustainability

Risk Management

Governance

Financial /Corporate Information

34

Procurement Strategy

Leveraging digital technology to identify latent needs

Creating value and optimizing
performance as a world-classprocurement organization

As part of our efforts to address the labor shortage due to thedeclining birthrate and aging population and reforming work
styles, we are promoting DX in the area of procurement. The
introduction of SAP Ariba*1 as an operational tool for purchasing
indirect materials is an example of this. We are promoting
higher operational quality and efficiency by standardizing the
procurement process.
We are leveraging RPA*2 to improve operational efficiency.
By integrating, redefining, and standardizing our processes, we

Yoichi Nishiguchi
Executive Officer and CPO (Chief Procurement Officer)
Coca-Cola Bottlers Japan Inc.

are building a system that enables us to focus our resources on
the core operation of strategic procurement.
In promoting strategic procurement, we are actively
working to create new opportunities to provide value by utilizing
business intelligence (BI) tools to analyze vast amounts ofexpenditure data from multiple perspectives. This approachallows us to identify latent procurement needs andopportunities to further reduce costs.

*1 SAP Ariba: A cloud-based B2B transaction system*2 An abbreviation for robotic process automation. Software robot technology that automatically performs routine tasks in place of humans

Coordinating with Cross Enterprise Procurement Group (CEPG) and overseas bottlers
to ensure efficient global procurement

Coordinating with suppliers to realize sustainability
We are working towards a World Without Waste by developing
a new collection model for empty PET bottles and cans. We are
reducing container weight and packaging volume while
increasing the use of sustainable materials. These efforts arealigned with our CSV goals, which include creating azero-waste society.
To address climate change, we are promoting renewableenergy use by installing solar panels in our plants, introducing
fuel-efficient vehicles, and developing sales equipment withlower power consumption and GHG emissions. We are alsoenhancing the process of sustainable procurement of raw
materials and commodities, in line with the greenhouse gas
reduction targets of the Coca-Cola System in Japan. Throughour procurement activities, we are contributing both directly
and indirectly to achieving these targets.
We believe in building strong partnerships with our
suppliers by fostering fair and equal trade. To achieve this, we
expect our suppliers to comply with our Supplier Guiding
Principles, which reflect our values on human rights, theenvironment, and labor.

We are committed to transforming the Procurement Division
into a world-class procurement organization. We work toachieve this by sharing information and best practices with
CEPG*3, the global procurement network of the Coca-Cola
System, and collaborating more closely than ever before withoverseas bottlers. We will also boost coordination withdomestic bottlers to implement joint procurement*4. We aredeveloping a program to improve procurement capabilities,*3 A global procurement network of the Coca-Cola System aiming to optimize costs and qualities by leveraging its global procurement scale*4 An initiative to centralize procurement at CCBJH, including negotiations with suppliers, to source items that are common
requirements of domestic bottlers, such as sugar and other raw materials, PET bottles and other supplies, and vending machines.
*5 A method of increasing operational efficiency by removing waste and reducing variation

Procurement strategy leveraging economies of scale and the advantage of Coca-Cola System
Global procurement

Carrying out procurement activities with compliance and governance in mind
Our business has been significantly impacted by sudden andunavoidable changes in global macro environment, such as therising raw material, supplies, and energy prices and the adverse
fluctuations of foreign exchange rates. To stabilize our businessin this uncertain environment, we implement risk hedging
measures for commodities and foreign exchange in cooperation
with the Finance Division, when appropriate.
We have experienced longer delivery times for purchased
products due to supply shortages of key components,
particularly semiconductors used in vending machines.
Additionally, global supply risks emerged in 2022 due todependence on China and the lockdowns in Shanghai in
response to the spread of COVID-19. To manage these risks,

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

we identify potential risks and update countermeasures asnecessary, including those related to natural disasters andcyberterrorism. In this way, we are working closely with our
suppliers to build a stable supply system.
We prioritize legal compliance in our procurement activities
by ensuring adherence to regulations such as the Act against
Delay in Payment of Subcontract Proceeds, Etc. to
Subcontractors. We conduct all procurement activities withcompliance, governance, and fair and transparent trade inmind. To ensure that all relevant divisions are informed andequipped to maintain these standards, we provide in-housetraining sessions, not only for Procurement Division but all
relevant divisions.

which will include training and leveling up the skills of our teamand preparing the next generation of leaders.
We actively work to improve our capabilities, and one suchspecific effort is to develop human resources that can increase
the organization’s productivity and create value throughOperational Excellence (OE) activities using Lean Six Sigma*5. We
will also roll out training to enhance procurement skills for every
position and division linked to the company-wide training plan.

Each ofglobal suppliers

Negotiation and determination ofgeneral framework forterms of purchase

CEPG,
the global procurement
network of
the Coca-Cola System

Information sharing

Information sharing/coordination

Joint procurementin JapanSuppliers

Bulk purchasing of
raw materials, supplies, etc.
Determination ofdetailed specifications
and conditions

Bulk purchasing of
raw materials,
supplies, etc.

CCBJH

Purchasing of undiluted solution

Payment ofservice charge

Hokkaido Coca-Cola Bottling Co., Ltd.
Michinoku Coca-Cola Bottling Co., Ltd.
Hokuriku Coca-Cola Bottling Co., Ltd.
Okinawa Coca-Cola Bottling Co., Ltd.

Information sharing/coordination

Coca-Cola (Japan) Company

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

35

Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Governance

Financial /Corporate Information36

People Strategy

The importance of leaders who promote transformation

Executing People Strategy aimed
at maximizing the value ofour human resources

In these times of increasing diversity among people and values
and upheavals in the business environment, implementing
management strategies swiftly and flexibly to promotetransformation is vital. For that to be possible, it is essential tohave leaders (key people) who promote change. We are building
a pipeline to secure key people as a part of the humanresources development and career paths elements which are
the core of our People Strategy. The pipeline consists of the key

Narihiko Uemura
Executive Officer and CHRO (Chief Human Resource Officer)
Coca-Cola Bottlers Japan Inc.

people who will lead the execution of management strategies
and the next-generation leaders who are candidates to succeed
them. We have established Coca-Cola University Japan (CCUJ),
an in-house university, as a means of continuously producing
key people in each generation and position, strengthening thepipeline. In so doing, we are strengthening the development of
human resources who will lead transformation based on
management strategies (Details on pages 43-46 Inclusion).

Initiatives to improve organizational capabilities
We are working to improve the capabilities of the entire
organization in order for our key people to take the lead ininitiatives and further the transformation. We have implemented
a Career Journey program that clarifies career paths for theCommercial, Logistics, and Manufacturing divisions to whichmost of our employees belong. It is designed to makeemployees aware of their own career plans and give them more

opportunities to experience growth. In addition, in order to help
employees develop the skills to realize their career plans, weoffer a program called “Knowledge Mall.” This self-development
support program enables employees to learn various content ina variety of ways, fostering a culture in which each employee
can learn independently.

Implementing our People Strategy to bring out the full value of our human resources
The CCBJH Group established our People Strategy based on
our mission, vision, and values (MVV) to maximize the value ofour human resources. Our People Strategy consists of the fourpillars of recruiting, human resources development, career
paths, and retention, as well as the underlying development ofworking environments and systems. Thanks to the integrationand other developments, we are a company where humanresources and cultures espousing various values coexist. To
fully leverage these strengths, we are planning andimplementing various measures. Our aim is to create acomfortable working environment for our employees anddevelop our human resources to deliver sustainable growth.

Structure of our People Strategy

Mission, vision, and values (MVV)

Recruiting

Human
resourcesdevelopment

Careerpaths

Retention

Development of working environments and systems

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

Recruitingҋ Acquire the best people toenhance our corporate value

Human
resourcesdevelopment

ҋ Develop the overall capabilities of
employees and leaders promoting
transformation

Career path

ҋ Develop human resources bypresenting clear career paths to
employees

Retention

ҋ Endeavor to retain the humanresources that support our company

Development ofworkingenvironments
and systems

ҋ Promote diversity, equity, andinclusion (DE&I), as well as
well-being, health and productivity
management, and safetyҋ Develop an environment and systems
that enable flexible work styles

Fostering corporate culture and increasing employee engagement throughthe development of working environments and systems
We are strengthening our initiatives to retain the people that
support our company. By introducing a new compensation
system that emphasizes results, developing a commendation
system, and introducing a Thank You Badge program, aninternal system in which employees give each other badges
expressing their gratitude and admiration, we are fostering aculture of mutual praise. As for the development of working
environments and systems, we are promoting work styles that
increase productivity by combining office work, telecommuting,and satellite office work. Additionally, our Commercial Division is
working to improve operational efficiency by conducting remotebusiness talks and allowing team members to go directly home

after business meetings. We are also developing officeenvironments featuring an Activity Based Working* design. It isalso important to maintain and improve the health of ouremployees, and we are working to foster a health-first
corporate culture where employees can work with peace ofmind and enjoyment. In this way, we are promoting Best Place
to Work measures to improve employee engagement.
* A work style that allows employees to choose the most productive time and place
to work according to the nature of what they are doing

Details of our health management initiatives
https://en.ccbji.co.jp/csv/humanrights/health.php

Strengthening human capital management by improving our People Strategy
We have been promoting initiatives based on thePlan-Do-Check-Act (PDCA) cycle, such as checking theeffectiveness of measures by conducting surveys to ascertainchanges in employee engagement and awareness, andimplementing improvement measures. Along the way, we haveadded and flexibly updated measures depending on businesscircumstances. To further strengthen the PDCA cycle, we will
enhance the effectiveness of our People Strategy. This includes
further improving the environment for visualization of HR data,setting KPIs for each measure, and using DX tools to efficiently
and effectively implement monitoring and provide analysis andinsights. It is our people that will come up with and executestrategies. Promoting a People Strategy that maximizes thevalue of our human resources is the very essence of humancapital management. To achieve sustainable growth, we will
come together as a company and keep improving the initiativesof our People Strategy.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

37

Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Governance

Financial /Corporate Information

38

Part 3

Sustainability
39

Sustainability Strategy

41

Initiatives Based on CSV Goals

43

Inclusion

47

Communities

51

Resources

Tomonoura, Setonaikai National Park,
Fukuyama City in Hiroshima Prefecture
Photo by Osamu Izumi
West Japan Operation Division
Coca-Cola Bottlers Japan Vending Inc.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

39

Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Governance

Financial /Corporate Information

40

Sustainability Strategy

Sustainability Committee promotion system

Promoting sustainability
management based on
the concept of “ownership”

Flow of sustainability promotion

Sustainability Committee operations

Board of Directors
ReportMaki Kado
Executive Officer, Chief Business Management & Sustainability Officer
Coca-Cola Bottlers Japan Inc.

Chairperson

Representative Director, President and CEO

MemberPrimarily composed of ELT* members and,depending on the agenda, related executives
may also participate

AgendaPolicies and strategies on various
sustainability-related issues, particularly climatechange areas and biodiversity conservation

Frequency

Quarterly (January/April/July/October)

Reportingҋ Details of implementation are reported to the Boardof Directors in the Business Execution Report.
ҋ Agenda items requiring resolution are referredto the Board of Directors

MonitorSustainability Committee

Secretariat : Sustainability Strategy Division

ReportMonitor
TCFD Working Group
Align
Functions* An abbreviation for Executive Leadership Team. Management organization in CCBJI
Group including CEO and function heads

Our sustainability strategy makes CSV the cornerstone of management
The mission of the CCBJH Group is to deliver happy moments
to everyone while creating value. These words convey ourstrong desire to create value that brings happiness and special
moments to people’s everyday lives and a better future throughour employees, products, and services. To achieve this, wehave made creating shared value (CSV) a cornerstone ofmanagement. This means enhancing both economic value
through business growth and social value through the resolutionof social issues. This is the basis of our sustainability strategy.

Achieving the CSV Goals to realize our mission
In 2019, the Coca-Cola System in Japan announced its
sustainability framework, which identifies three platforms Inclusion, Communities, and Resources - and nine priority issues.
We established non-financial CSV Goals as numericaltargets not only to identify but also to solve priority issues. We
are steadily making progress toward achieving our goals byimplementing the PDCA cycle throughout the value chain andmonitoring the progress each year.

New Sustainability Committee
In 2023, we established a Sustainability Committee tostrengthen the system for developing policies and strategies
related to various issues including climate change andbiodiversity, in line with our CSV Goals. On this committee, theExecutive Leadership Team (ELT) discuss sustainability issues
then communicate the decided direction and strategies toensure all divisions carry out sustainable activities efficiently andCoca-Cola Bottlers Japan Inc. Integrated Report 2022

comprehensively. In addition, measures to address
sustainability-related risks, such as climate change andbiodiversity conservation, are an important priority for our Boardof Directors, and we take risk selection and growth potential
discussed by the Sustainability Committee into account whenestablishing management policies.

Enhancing information disclosure outside the Company andfostering a sense of ownership inside the Company
We identified Mitigation of and Adaptation to Climate Change as
one of our material issues. In 2022, we disclosed information inaccordance with the TCFD recommendations, participated inclimate change initiatives, and conducted other activities such as
forest conservation and water source replenishment across our
territory in cooperation with local residents and employees. We
also continue to promote various horizontal recycling initiatives,
including “bottle-to-bottle,” “CAN to CAN*1,” “pallet-to-pallet*2,”
and “shell-to-shell*3,” to effectively utilize resources.

We hold regular online study sessions and e-learning
programs so that employees can understand and agree with
the CSV Goals and take action in respect of our CSV goals. We
are also training internal instructors to communicate oursustainability initiatives to external stakeholders.
*1 Horizontal recycling of aluminum cans
*2 Light blue or black platforms used for transporting and storing products*3 Cases for bottle products

Keeping up sustainability initiatives will lead to the delivery of
happy moments and the creation of values
As a company that uses the irreplaceable resource of water forbusiness, we are working to ensure its sustainability andmitigate environmental impacts to conserve the naturalenvironment. Accordingly, we have conducted water
replenishment activities, including tree-planting activities, topreserve water for decades. As a part of this, our employees
actively participate in clean-up activities for water sources toconserve and return to nature the same amount of water weuse at our plants. The things we have regarded with importanceand continued to do have ultimately led to solutions to social
issues. We will continue striving to create values and realize aworld where the air and water are clean and where everyone
can enjoy happy moments and a fulfilling life by actively andcontinually working to address various social issues.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

41

Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Governance

Financial /Corporate Information

42

Initiatives Based on CSV Goals

CSV Goals and status of achievement

CSV Goals: The CCBJH Group’s non-financial targets
Based on the Sustainability Framework of the Coca-Cola System in Japan, the
CCBJH Group established CSV Goals as non-financial targets in an effort to create

Sustainability
framework

Key issues

a sustainable business and society while achieving our Mission. To achieve each of
the CSV Goals, we are implementing initiatives throughout the value chain, checking
progress, and making steady progress toward achievement.
In terms of our sustainable material* usage rate for PET bottles, we have madestrong progress in initiatives such as “bottle-to-bottle” and achieved a usage rate of
50% in 2022. We have also strengthened our partnership with local communities

Products(Tailored productdevelopment/
health support)

by concluding water source conservation agreements with forest conservationgroups and local governments in water source areas of all 17 of our plants. As aresult, the water replenishment rates in 2022 were well above our target.
Communities

Change, which we have identified as a material issue. As part of our efforts toSociety(Contributions to
the local community)

reduce greenhouse gas (GHG) emissions, we aim to reduce Scope 1 (direct GHG
emissions) and Scope 2 (indirect GHG emissions) emissions by 50% versus 2015
levels and to reduce Scope 3 (other indirect GHG emissions) by 30% versus 2015
levels by 2030, net zero in greenhouse gas emissions by 2050 across our entire
value chain. We are also working to achieve our GHG reduction targets by focusing
on aiding the introduction of renewable energy.
* The total of bottle-to-bottle recycled PET materials and plant-derived PET materials

World Without Waste(Zero-Waste Society)

The Sustainability Framework for the Coca-Cola System in Japan

Inclusion
Priority
Topics

Focus
TopicsGender
Age/Generation
Disabilities
LGBTQ

Communities

Resources࠮ Drive impact throughtwo national platforms(Inclusion, Resources)

Packaging/PET

࠮ Initiatives that are
sustainable andadditionally have local
relevance

Water

Category

Target50%–79%2021 results

2022 results

6.3%

6.6%

Female managers by 2025

10%

Female managers by 2030

20%

Low and no calorie options for core brands

100%

100%

100%

FOSHU/functional product growth (compared to 2016)

300%

177%

146%

Front-of-pack calorie label and straightforward nutritional information

100%

100%

100%

Observation of The Coca-Cola Company Responsible Marketing Policy

100%

100%

100%

Employee volunteers

10%

3.7%

20.0%

Participants in community programs

1,000,000

900,000

910,000

Sustainable materials usage*1 by 2022

50%

Sustainable materials usage*1 by 2030

100%

40%

50%

Ratio of products using sustainable materials*1 by 2025 (number of bottles sold)100%

About 90%

About 90%

Further lightweight PET packaging by 2030 (compared to 2004)

35%

30%+

30%+

Collection percentage compared to sales volume by 2030

100%

94.0%*2—

Replenishment rate, focusing on watersheds near our plants

200%

353%

420%

Water usage reduction by 2030

30%

19%

19%

Scope 1 and 2 reduction in greenhouse gas emissions by 2030

50%

21%

20%

Scope 3 reduction in greenhouse gas emissions by 2030

30%

24%

25%

Sustainable sourcing

100%

100%

100%

Adherence to Supplier Guiding Principles across the CCBJH Group value chain

100%

100%

100%

Diversity & Inclusion
Inclusion

A future area that we will focus on is Mitigation of and Adaptation to Climate

At least 80%

Less than 50%* Baseline year is 2015 and target year is 2025 unless otherwise stated

Progress

Extensive partnerships across industry and environmental organizations by 2030

Resources
Water

Greenhouse gas emissions
Renewable energy

Climate change
Net zero in greenhouse gas emissions by 2050
Promotion of renewable energy

Procurement / Human rights(Strengthening ofbusiness foundation)*1 The total of bottle-to-bottle recycled PET materials and plant-derived PET materials*2 PET bottle collection rate (Source: The Council for PET Bottle Recycling “2022 Annual Report of PET Bottle Recycling”)

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

43

Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Governance

Financial /Corporate Information

44

Inclusion
To address the different needs of our stakeholders and ensure sustainable growth, we are focused on
developing diversified human resources. In addition, we are continuing to create a working environment inwhich every employee can fully demonstrate their strengths, regardless of their background or values.

Diversity, Equity and Inclusion (DE&I)

Gender

The CCBJH Group has identified DE&I as a material issue. We
recognize the value of diversity in meeting the varied needs of ourbusiness environment, customers and partners, and in driving thesustainable growth of our Group. We aim to create an inclusive
workplace where every employee, regardless of their background,can demonstrate their abilities and fulfill their aspirations.
Our management structure places a high value on diversity
in all aspects, including nationality, gender, age, and background.
We are committed to promoting diversity management throughdiscussions, decision-making processes, and other related
activities based on a wide range of perspectives.
Our DE&I section is a dedicated unit leading the planningand promotion of Group-wide measures related to diversity. It
holds bimonthly diversity forums, where ambassadors selectedMedium- to long-term vision for DE&I
By respecting the diversity of ourworkforce, we will provide opportunities
to enable all employees to leverage theirfull potential, regardless of gender, age,
race, nationality, sexual orientation,
gender identity and expression, disability,
and other attributes, ensuring that they
are unaffected by factors that may
restrict their ability to work.

from each division and HR personnel share best practices andissues, resolve problems in a timely manner, and help build abetter work environment.
࡛ Group-Wide Measures for Raising DE&I AwarenessAchieving DE&I requires all employees to have mutual respectfor differences in background, values, and thinking. Our
company places great emphasis on creating a workplace freeof discrimination and harassment, with strict rules against such
behavior. We also provide regular practical harassment
prevention training tailored to each division, in addition to
training for new hires and managers. To foster an organizational
culture that values and respects diversity, we offer Unconscious
Bias Training and Inclusive Leadership Training.

Factors restricting
ability to work

Individual attributes

GenderAge

Nationality

Sexualorientation
genderidentity &expression

Race
Time

HealthLanguage

Disability

Nationality
Our company is committed to diversity based on the idea thatdiversity is a driving force for growth, and we hire talented
non-Japanese resources both as new graduates andmid-career hires. For non-Japanese employees, we provide
training on the Japanese language, as well as support on theculture and lifestyle, to help them fully strengthen their skills andabilities. In addition, through personnel exchange programs
within the global Coca-Cola System, we are learning from bestpractices overseas and advancing operational reforms that willlead to business growth.

We are focused on creating an environment where women canplay an active role. In addition to being an adopter of flexible
work and remote work systems, we are taking a holistic
approach to empowering women, including expanding the
spousal maternity leave system and encouraging higher leave
utilization rates.
To further cultivate female managers and manager
candidates, we have established a system providing womenthe opportunity to systematically learn the perspectives andskills required of women as leaders by establishing training
programs according to position and rank.
࡛ Sponsorship Program(training for female director candidates)
This is a program for division heads aimed at cultivating female
director candidates. Eligible female division heads are provided
with opportunities to learn the perspectives and viewpoints
necessary for management through regular individual meetings
with their sponsoring officers.
࡛ Accelerate Her (for Female Managers)
We have a program designed to cultivate female division heads,
which targets section heads. The program selects participantsfrom various divisions to join a six-month cross-division project.
This project aims to equip participants with advanced conflict
management, communication, and leadership skills necessary
for division head positions. By running this project long-term,
we encourage networking among section heads, creating aplatform where female leaders can consult with each otherwithout feeling isolated.
࡛ Female Leadership Program (for Female Non-Managers)
This program is for general employees and aimed at cultivating
female section heads. Eligible employees learn the mindset andnecessary skills through approximately six months of leadershiptraining. The goal is for each participant to identify theirstrengths and opportunities, and to take steps toward
developing their career. Supervisor training is also provided,
which builds an inclusive corporate culture that encourages thepromotion of women.

Female managers (As of end of February 2023)

7.2%

Target

10% by 2025
20% by 2030

࡛ Initiatives To Encourage Male Employees To Take
Parental Leave
To make it easier for male employees to take advantage ofchildcare leave system, we are working to encourage the use ofmale parental leave. In 2018, to promote awareness of maleparental leave, we launched a project called “Papa Apron.” Ourmanagers actively present the apron to male employees who
have become fathers, congratulating them and encouraging
them to take leave. We are not only focusing on creating
systems, but also on implementing various strategies andmeasures to enable their use.

Papa Aprons, utilizing our product design

International Women’s Day
Since 2023, the week including International Women’s Day on March 8th isdesignated as an International Women’s Week. We hold a panel discussion
inviting external speakers and sessions to learn how to build a career fromin-house female managers. This helps all employees to learn and addresss
issues in achieving gender equality from an individual and organizational
perspective as well as to create opportunities to encourage specific actions.
One event attended by international talent, designed to encourage andinvigorate communication among employees

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

Employees from Coca-Cola Beverages Philippines Inc. attending
a personnel exchange program held at Kiyama Plant

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

45

Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Governance

Financial /Corporate Information

46

Inclusion

Next-generation development programs࡛ Coca-Cola University Japan In-House University
In 2020, we established Coca-Cola University Japan (CCUJ) as
an internal university to cultivate the next generation of leaders
who will drive transformation and future growth of the
Coca-Cola System and create new value in the beverage
market. CCUJ comprises three leadership levels: division
heads, section heads, and general staff. Participants from eachdivision will undertake a six-month program to enhance theirstrengths in the five key capabilities essential to our growth:
innovation, strategic thinking, people management, effective
communication, and growth mindsets. They will also work toaddress real-world issues. By collaborating on projects andLGBTQ
engaging in discussions with members from different divisions,participants will gain a broader perspective and grow as leaders
for the next generation.
࡛ Global English Transformation(GET) proficiency program
We provide the (GET) proficiency program for employees intheir 20s and 30s to more proactively communicate CCBJHGroup’s initiatives overseas while also absorbing knowledge
from outside Japan, applying it to our daily activities, andcreating business growth. Participants compete and encourage
each other to progress throughout the six-month intensive
program, steadily strengthening their English language skills.

࡛ Internal Awareness-Raising Efforts
We are actively working on raising awareness, establishingsystems and mechanisms, and building an ally* network toensure that all employees have accurate knowledge of LGBTQ
issues to foster an environment where diversity is respected anddiscrimination is avoided, both inside and outside the company.
We have amended the definition of a spouse in our internal
regulations to allow all employees to take advantage of welfare
benefits, such as childcare leave and family care leave,
regardless of the gender of their partners or their marital status.
We also amended our Human Rights Policy to include gender
identity and expression, setting forth policies not just in terms ofphysical traits, but also in a manner that is consistent with thediversity of “mind” and “character.” Furthermore, in 2021, welaunched an LGBTQ consultation service, where not only
employees but their managers can anonymously seek help andguidance on LGBTQ related topics.

࡛ External Activities
We operated an exhibit booth at Tokyo Rainbow Pride 2023
jointly with Coca-Cola Japan. At this multi-day event, ouremployees at the booth sold a set of Coca-Cola wrapped inrainbow wristbands commemorating the event, and displayed
DE&I initiatives from CCBJH and Coca-Cola Japan.
࡛ Formulated the LGBTQ + ALLY HANDBOOK
We have introduced throughout the Coca-Cola System inJapan the “LGBTQ + ALLY HANDBOOK” that provides aneasy-to-understand overview of the fundamentals regarding
LGBTQ and allies, including a glossary of terms, history andcurrent conditions. This handbook has been made available to all
employees and offers free usage by any company or organizationconsidering promoting understanding of LGBTQ issues.

* Ally is a person who proactively understands and supports LGBTQ regardless ofwhether or not they are sexual minorities

Disabilities
In 2019 we established a special-purpose subsidiary to createa work environment where individuals with disabilities candemonstrate their strengths. The subsidiary offers a variety ofwork positions, including laundry, clerical, and sales equipment
parts washing, to allow each person to demonstrate theirunique qualities and abilities. We also support the activities ofpara-athletes and deaf athletes. In addition to participating inathletic activities, our athletes make a wide range of community
contributions by giving lectures on disabilities and diversity toschools and community groups.

Employment rate of persons with disabilities*

2.48%

Wristbands commemorating Tokyo Rainbow Pride 2023

* “Report on the Employment Status of People with Disabilities”
submitted to the Director of the Public Employment Security
Office with jurisdiction.

Collaborative participation in Tokyo Rainbow Pride with Coca-Cola Japan (2023)

Uniform laundry duties,
one of major tasks at
the special-purpose subsidiary

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

Haruki Masanari
A para-athlete during his qualifying attempt
for the 2024 Paris Paralympics javelin throw

The LGBTQ + ALLY HANDBOOK

Kazuhiro Takai
A dual decathlon and deaf track &field high jump competitor

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

47

Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Governance

Financial /Corporate Information48

Communities
Our aim is to develop solutions for social issues, foster sustainable communities and maintain ongoing
communication with them.

Local seminars on Sustainable Development Goals
With the momentum for Sustainable Development Goals(SDGs) gaining pace, the CCBJH Group is dedicated to taking
new initiatives towards achieving these goals. As part of thiscommitment, we have designed a series of lectures andpresentations about our CSV activities, delivered by our trained
employee lecturers at schools across Japan. Moving forward,
we will continue to prioritize creating communication
opportunities with local communities and adopt new
approaches like this to our objectives.

Cooperation with local governments and organizations for the SDGs
Number of SDG seminars held in 2022

38
7,033

Number of seminars:
Number of participants:

Joint community projects between industry, academia, government, and the private sector
We partner with local governments, educational institutions,private organizations, and industries to support initiatives aimed
at addressing local issues and achieving SDGs. Here are a few
examples of our collaborations:࡛ The Sendai Youth Award (Miyagi Prefecture)
Since 2017, we have collaborated with Sendai City and offered
the Sendai Youth Award to recognize outstanding efforts byyouth organizations that contribute to achieving a sustainable
society and resolving social issues.
In the sixth award held in 2022, the target area was
expanded to all of Miyagi Prefecture with the aim of creating anenvironment in which more young people can play an activerole. Eight finalist teams that passed the preliminary screening
presented their efforts in November.
࡛ SDGs Workshop, Mie Mirai (Mie Prefecture)
This workshop is held as a collaborative effort among Mie
Prefecture, Dr. Masao Aoki’s research lab, Recurrent Education
Center at Mie University, the nonprofit organization MBridge
and CCBJH. In this event, participants exchange ideas toincrease Mie Prefecture’s attractiveness and solve its problems
through dialogue.
࡛ Challenge Internship Project (Fukushima Prefecture)
Since 2016, we have partnered with Fukushima Prefecture’s
Challenge Internship Project in cooperation with Saposen, a
support center for organizations active in Fukushima. Throughinternships we support learning and other experiences foryoung people. We promote future city planning by helping
educate young people about issues facing the region and theattractiveness of Fukushima.
࡛ MIYAZAKI SDGs ACTION (Miyazaki Prefecture)
This project brings together high school students, university
students, and companies to learn and consider what asustainable economy and society should look like. In 2022,
CCBJH employees from our Ebino plant worked alongside local
students to recycle coffee beans and tea dregs.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

In April 2022, at the Asia-Pacific Water Summit in Kumamoto Prefecture,
Ryuichiro Maruyama, Head of CCBJH’s CSV Department, delivereda keynote lecture on the Coca-Cola System’s efforts to conserve
water resources.

In June 2022, our employees presented a lecture to students at Nagoya City
University in Aichi Prefecture. The lecture covered the current status and issues
regarding PET bottles, as well as our bottle-to-bottle initiatives. The students
are conducting daily research to solve the problem of marine plastic waste.

The Sendai Youth Award’s award ceremony (Miyagi Prefecture)

We have entered into agreements on the promotion of SDGs
and broader comprehensive partnership agreements with local
governments and organizations in its sales areas. The aim is tocreate value for communities through its beverage business
and work with stakeholders to address local issues.
࡛ Signed a Partnership Agreement on SDGs Promotion
with Oyama City (Tochigi Prefecture)
In December 2022, CCBJI and Oyama City signed an agreement
to promote and disseminate SDG information as well as
collaborate on SDG-related efforts. As a first step a vending
machine was installed at the Watarase Yusuichi Stork Community

Center to support environmental conservation activities that help
people coexist with endangered Oriental storks.
࡛ SDG Partnerships with Saitama Prefecture
CCBJH became a registered SDG partner with Saitama
Prefecture in July 2022 and endorses its unique SDG activities.
In August 2022 we launched a joint project called Saitama
SDGs Promotional Vending Machines. In December, weentered into an agreement with Saitama Prefecture andSaitama International Association to collaborate in thedevelopment of global human resources and donated a portionof sales to the Saitama Global Human Resources Fund.

Replenishing local water sources and preserving local biodiversity
Water is an essential resource for our business, and we takeactions to promote water replenishment around our 17 plants.
The water resource areas around our plants serve multiple
functions. Not only do they store water, but also serve as
habitats and nurturing grounds for plants and animals. ThroughCoca-Cola’s “Learn from the Forest” project, we aim to educate
local residents and our employees on the importance ofpreserving these irreplaceable water resources and biodiversity
in local areas. In 2022, due to COVID-19 restrictions, we could
only hold these programs in six regions: Miyagi, Ibaraki, Tokyo,
Hyogo, Hiroshima, and Miyazaki Prefectures.
Locations of watershed conservation activities
Manufacturing plants

Locations of watershed conservation activities

Zao Plant

Zao-machi, Katta-gun, Miyagi Prefecture

Saitama Plant
Iwatsuki Plant

Katashina, Tone-gun, Gunma Prefecture

Ibaraki Plant

Ishioka, Ibaraki Prefecture

Tama Plant

Higashi-Kurume, Tokyo

Ebina Plant

Atsugi and Ebina, Kanagawa Prefecture

Hakushu Plant

Hokuto, Yamanashi Prefecture

Tokai Plant

Ena, Gifu Prefecture

Kyoto Plant

Ujitawara-cho, Tsuzuki-gun, Kyoto Prefecture

Akashi Plant

Tamba-Sasayama, Hyogo Prefecture

Oyama Plant

Houki-cho, Saihaku-gun, Tottori Prefecture

Hiroshima Plant

Mihara, Hiroshima Prefecture

Komatsu Plant

Saijo, Ehime Prefecture

Tosu Plant
Kiyama Plant

Tosu, Sage Prefecture /Kiyama-cho, Miyaki-gun, Saga Prefecture

Kumamoto Plant

Aso, Kumamoto Prefecture /Ozu-machi, Kikuchi-gun, Kumamoto Prefecture

Ebino Plant

Ebino, Miyazaki Prefecture

࡛ Held the First “Learn from the Forest” Programs in the
Water Resource Area Around the Tama and Akashi Plants
In April 2022, we signed an agreement on natural environment
preservation with the Tokyo Metropolitan Government and theRegional Partnership Support Center. Based on this agreement,

Participants installing protective fences to protect rare plants from deer
(Tamba-Sasayama, a water resource forest for Coca-Cola Bottlers Japan)

46 of our employees and affiliates participated in the inaugural
Coca-Cola “Learn from the Forest” Project at the Minamisawa
Green Conservation Area in Higashi-Kurume, Tokyo. This area isa vital water resource for our Tama Plant. We worked together
to maintain the promenade, contributing to the preservation of adiverse natural environment since rare plants such as the
Anemone nikoensis grow in the area.
In December, we hosted another Coca-Cola “Learn fromthe Forest” Project in Tamba-Sasayama, Hyogo, at the Akashi
Plant water resource area forest. This was our first such event
since signing the agreement in 2019.
During the event, about 50 participants, including
employees and their families, learned about the importance ofpreserving woodland areas near human habitats andmaintaining forests through activities like tree clearing. They
also helped protect endangered golden orchids, listed as aClass II endangered species by the Ministry of the Environment,
by installing protective fences and restoring vegetation.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

49

Introduction

Communities

Value Creation Story

Sports clinics andhockey clinics held in 2022

Financial &Non-Financial Strategy* Organizations and programs that collect discarded food that is still of goodquality and receive donations from companies. They then deliver the food tosocial welfare institutions and people who are in need.

࡛ Scholarship Program
Coca-Cola System’s scholarship aid program date back to
1966. As an affiliate of The Coca-Cola Foundation, we support
grant-based scholarships to foster the development of
top-caliber young people who can contribute to the local
community. In addition to prospective undergraduate students,
students who plan to enter graduate school to work onsustainability and SDGs are also eligible for scholarships.
࡛ Support for the Zenshiren
As part of the Coca-Cola System’s commitment to social
participation for disabled people, including children and adults,
we donate a portion of the proceeds from vending machineswith the Zenshiren sticker to Zenshiren, an organization that
promotes greater social participation for disabled people andincreases facilities for them. This program began in 1980 andhas continued for over 40 years.
࡛ Cooperation with Education Reform at
Ichimura Nature School in Kyushu
We have also contributed to children’s education reform byhelping to establish Ichimura Nature School in Kyushu. The
school provides a natural setting where children can develop
independence, social skills, proactiveness, and creativity
through activities such as cultivating and harvesting crops andworking together as a team. The school is located near the cityof Tosu in Saga Prefecture, and students spend eight months
between the end of March and the beginning of December with
their peers and staff members.

Donations of products to food banks in 2022

38,713 cases
937,852 bottles

Donating beverage products to the NPO eWork Ehime (Ehime Prefecture)

Promoting employee volunteering
Based on the idea that employees are members of their local
communities, we encourage employees to volunteer in waysthat contribute to local communities. These ways include social
welfare activities, cleanup activities, forest preservation
activities, and grassland regeneration activities, and we facilitate
these by providing a volunteer activity leave system.

࡛ The Coca-Cola Red Sparks Field Hockey Team:
Firmly Rooted in the Community
Administered by the Group the Coca-Cola Red Sparks field
hockey team is based in Hiroshima City, Hiroshima Prefecture
and is a member of the Hockey Japan League (HJL).
In 2022, the team participated in three major national hockey
competitions, finishing second in each. They won first place in the
Prince Takamado Cup 2022 Hockey Japan League and regained
the championship in the season finals after two years.
In 2022, the team also resumed holding sports clinics andparticipating in community events, which had been limited dueto the COVID-19 pandemic. The team also participated in the
Hiroshima Sports Academy Qualifying Competition, which aims
to develop athletes who can compete on the international

50

The Coca-Cola Red Sparks Hockey Team, winners of
the Prince Takamado Cup 2022 Hockey Japan League

Participation in Love Earth Clean Up (Fukuoka)

stage. It also held a hockey clinic in Kurihara, Miyagi Prefecture,
for the first time in two years, and sent instructors to the
Human Rights Sports Clinic, held at Taisho Elementary Schoolin Taito, Tokyo. Through these activities, we contributed to thecreation of a bright and vibrant community and a society where
everyone can be active and healthy. In recognition of these
activities, the team received the Hiroshima Prefectural Sports
Association Sports Award in December 2022.
࡛ Mission and Support Activities of
the Company Ambassador
We have appointed Shotaro Tsuoka as Company Ambassador.
Tsuoka aspires to join the 7-man rugby team that will represent
Japan. With CCBJH’s support, Tsuoka will be able toconcentrate on competitions as a member of the national team.

Communication through plant tours
We value plant tours as a way to directly communicate withcustomers, clients, and other stakeholders. We have tour
facilities at six of its 17 domestic plants: Zao Plant (Miyagi
Prefecture), Tama Plant (Tokyo), Tokai Plant (Aichi Prefecture),
Kyoto Plant (Kyoto Prefecture), Hiroshima Plant (Hiroshima
Prefecture), and Ebino Plant (Miyazaki Prefecture).
࡛ Plant Tours for New Lifestyles
Online plant tours were launched in June 2021 to cover live
tours suspended to prevent the spread of COVID-19. These
tours are available remotely from anywhere, whether at home,school, or otherwise. Online tours were enjoyed byapproximately 5,000 customers in 2022.
࡛ Held the First Online Summer School
In addition to regular plant tours, the Group held the firstsummer school online in 2022. In this school, families enjoy
learning about our initiatives for the SDGs, which can be used
as an independent study topic. Approximately 1,000
participants joined this four-day program.
࡛ Reopened In-Person Plant Tours
In December 2022, the Ebino Plant in Miyazaki Prefecture
reopened for tours ahead of the six other plants in the area,
bringing a liveliness back to the plants for the first time in two
years and nine months.
For the time being, tours will be gradually resumed, though
on a limited scale and with infection control measures in place
to create opportunities for face-to-face communication withcustomers while maintaining a hybrid structure offering online
tours as well.

Employee volunteers in 2022

20.0%

The first online summer school

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

Financial /Corporate Information

Community support through sports

࡛ Donating Beverage Products to Food Banks*
We have been partnering with Second Harvest Japan, thecountry’s first food bank, and the National Food Bank
Association since 2016 to donate beverages to institutions thatprovide meals for children and social welfare institutions. In
2022, we donated 38,713 cases (937,852 bottles) of
beverages to 24 organizations in 17 prefectures.

Cleanup activities by upcoming
new hires for 2023 (Tokyo)

19
5,160

Governance

Number of programs:

Number of participants:

Support for local communities

Risk Management

Sustainability

Ebino Plant returns to holding lively tours after nearly three years

Forest preservation activities (Hiroshima)

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

51

Introduction

Value Creation Story

Financial &Non-Financial Strategy

9LZV\YJLZ

Sustainability

Risk Management

Governance

Financial /Corporate Information

52

Details of our initiatives on resource conservation
https://en.ccbji.co.jp/csv/environment/

In order to make effective use of valuable resources in a sustainable manner, we will continuously devise andimprove ways to contribute to the protection of the environment.

(JOPL]PUNH>VYSK>P[OV\[>HZ[LALYV>HZ[L:VJPL[`

2030 Packaging Vision of the Coca-Cola System in Japan࡛7HJRHNPUN=PZPVU
In 2018, The Coca-Cola Company set a global target to reduce
environmental impacts and achieve a World Without Waste. To
support this goal, the Coca-Cola System in Japan established the2030 Packaging Vision in January 2018, and updated it in July
2019 to be achieved ahead of schedule. Our aim is to reduce
waste from product packagings and promote the recycling ofplastic resources in Japan, in line with the vision of a World
Without Waste.
࡛;OYLL*VYL,SLTLU[ZHUK9VHKTHWThe 2030 Packaging Vision consists of three pillars: Design,
Collect, and Partner. Specific targets have been set for each of
the three pillars, and we are working to achieve these by 2030.

Three core elements of 2030 Packaging Vision

DesignCollect

Activity Results

Partner

Designҋ(JOPL]LK Z\Z[HPUHISLTH[LYPHSZMVYKVTLZ[PJZVM[KYPUR7,;IV[[SLZPU
ҋ<[PSPaLZ\Z[HPUHISLTH[LYPHSZPUHWWYV_  VMV\Y7,;IV[[SLWYVK\J[ZZVSKPU1HWHUU\TILYVMIV[[SLZsold).
ҋ(ZVM+LJLTILYOH]LPU[YVK\JLK YLJ`JSLK7,;IV[[SLZHJYVZZMV\YIYHUKZHUKWYVK\J[Z
including flagship products such as Coca-Cola.
ҋStarting with I LOHAS products released in April 2020, currently manufacture 21 labelless products across
10 brands, including Ayataka, Sokenbicha, THE TANSAN STRONG From Canada Dry, Aquarius,
Coca-Cola, and Georgia. We plan to steadily expand our range of labelless products in the future.
ҋ-YVTYLK\JLK[OL^LPNO[VM*VJH*VSHTS7,;IV[[SLZMYVTN[VNҋ0UYLK\JLK[OL^LPNO[VM.LVYNPH1HWHU*YHM[ZTHUTS7,;IV[[SLZMYVT N[VNHUK
*VZ[H*VMMLLTS7,;IV[[SLZMYVT N[VN;OL[V[HSVMIV[[SL[VIV[[SLYLJ`JSLK7,;TH[LYPHSZHUKWSHU[KLYP]LK7,;TH[LYPHSZ

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

Activity Results

Collect

Partner

The goal of our Packaging Vision 2030 is to create a zero-waste society, and to help achieve this we are focusing onbottle-to-bottle recycling, which regenerates new PET bottles from used ones.
࡛*VVWLYH[P]LIV[[SL[VIV[[SL]LU[\YLZ^P[OSVJHSNV]LYUTLU[ZWe are working with local governments to collect and recycle
product used PET bottles. These projects aim to bring together
residents, businesses, and governments to make used PET bottles
collection and recycling more reliable. We have been working on
making agreements for horizontal recycling of PET bottles since2022, and as of April 2023, have made the agreements with ten
municipalities. In 2023, we made agreements with Moriyama City in
Shiga Prefecture and the cities of Zama
and Ebina in Kanagawa Prefecture in
January, Numazu City in Shizuoka
Prefecture in February, Nishinomiya Cityin Hyogo Prefecture in March, the cities
of Fukuoka and Kitakyushu in Fukuoka
Prefecture in April.

࡛*VVWLYH[P]LIV[[SL[VIV[[SL]LU[\YLZ^P[OI\ZPULZZWHY[ULYZ
We teamed up with Mitsubishi Estate Co., Ltd. in June 2022 tolaunch a bottle-to-bottle recycling program in the Marunouchi area ofTokyo. The scheme collects used PET bottles from the office sharedarea and turns them into new PET bottle products. Through our
vending machines, we encourage office workers to recycle used PET
bottles by separating them.
In April 2023, we launched a new bottle-to-bottle project thatcollects used PET bottles from select Sugi Pharmacy Co., Ltd.
stores in Aichi and Mie Prefectures, and turns them as raw
materials for our new products. We plan to gradually expand thecollection area over time.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

53

Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Governance

Financial /Corporate Information

54

9LZV\YJLZ

5L^Z[YH[LN`MVYNSVIHS^H[LYZLJ\YP[`HUKYLZV\YJLZ[L^HYKZOPWPUWSHU[HYLHZIn March 2021, the Coca-Cola Company introduced a global
framework for its water security strategy, which aims toconserve sustainable water resources by replenishing water incommunities and advocating for responsible water use in ouroperations and communities. At the CCBJH Group, we
recognize the importance of water as a vital resource in our
I\ZPULZZHUKHYLJVTTP[[LK[VYLK\JPUNV\Y^H[LY\ZLI` I`JVTWHYLK[V([[OLZHTL[PTL^LHYL
[HYNL[PUNH ^H[LYYLWSLUPZOTLU[YH[LI`PUZ\WWVY[of water resource conservation.
In the Coca-Cola System in Japan, we follow resource
conservation guidelines established by Coca-Cola Japan toregularly assess the vulnerability of our water sources. We

develop conservation plans for water usage at our plants that
focus on reducing water used in the manufacturing process
9LK\JLYL\ZPUN^H[LY9LJ`JSLHUKYLZ[VYPUN^H[LYYLZV\YJLZPU[OLZV\YJLHYLH9LWSLUPZOWe have signed water resource conservation agreements
PUHYLHZHYV\UKHSSWSHU[SVJH[PVUZ[VWYV[LJ[^H[LY
resources. We are working with local communities and experts
to protect water resources, all resulting in a replenishment rate
VM PU

Major water indicators and results

Coca-Cola System’s concept of the water cycle

Water used
for manufacturing

13,287,000 m

Details of the global vision for the new water security strategy
https://en.ccbji.co.jp/csv/environment/?id=tab2

Replenishment area3

+2.3 year on year%

Approx.

8,136 ha+4.1
year on year
ha

Water used in products

Replenishment rate

4,087,000 kL

420%+1.9 year on year%

+67 year on year%

Water resource
conservation agreements

3.25 L/L

17/17 plants

liters per product liter
year on year

year on year

+1

plant

Return water to nature
after thorough treatment

࡛ Assess water source
vulnerability
࡛ Draft and execute water
resource conservation plans

Water resource
conservationagreements in water
resource areas

3PNO[IS\LVYISHJRWSH[MVYTZ\ZLKMVY[YHUZWVY[PUNHUKZ[VYPUNWYVK\J[Z*HZLZMVYIV[[SLWYVK\J[Z࡛9LUL^HISL,ULYN`Our Hakushu Plant runs on hydroelectric power provided by
Yamanashi Power Plus, jointly operated by TEPCO Energy
Partner, Inc. and Yamanashi Prefecture.
At other plants, we use hydroelectric and other renewableenergy sources plan offered by TEPCO Energy Partner, Inc. The
electricity from hydroelectric energy purchased in this plan
produces no CO2 during generation. We also use the Tradeable
Green Certificate system, which certifies that power used inplants is electricity generated from natural energy sources.
Across our business we seek ways like these to promote anduse green energy.

Greenhouse gas reduction targets of the Coca-Cola System in Japan
2030 Reduction Targets

18%

Approx.

Water
Reducewater used Recycling

99%%

Approx.

Groundwater
Natural water
resource areas

82 %Approx.

Replenish

Cultivate water
resources throughforest preservation, rice
field flooding, andgrassland regeneration

57%
Approx.

Increase groundwater
recharge capacity,
cultivate undergroundreservoirs, and return
water to nature

Water used for manufacturing: After being used for cleaning and cooling in
the manufacturing process, water is collected, treated, and recycled. Before
being discharged into rivers, the water undergoes thorough treatment.
Water used in products: We promote watershed conservation through activities
such as planting trees, thinning forests, flooding rice fields, and regenerating
grasslands. These activities help improve our ability to replenish water sources
and nurture abundant groundwater, allowing us to return water to nature.

Direct GHG
emissionsIndirect emissions
from use ofelectricity/heatpurchased fromGHG emissions
across ourvalue chain

2030

-50

%

Improve energy consumption atƇŏêŚƞƒêŚčŤǕĆĔƒ

Improve distribution/transportationa third party

Scope 32015¡ĔƇƊĔƒĔŚƞêƞĹƽĔ-ǔŤƊƞƒby Coca-Cola System

Introduce renewable energy

Scope 1

Scope 2

River

Water usedin products

aluminum cans and distribution materials for recycling.
Together they help reduce GHG emissions by promoting therecycling of materials.

(Compared to 2015)

Water used for
manufacturing

Plant

Water used per 1L of product(WUR: Water Use Ratio)+0.01

Reduce & Recycle

HJYVZZ[OLLU[PYL1HWHU]HS\LJOHPUI` PU:JVWLHUKHUKI` PU:JVWLI`JVTWHYLK[VSL]LSZ;Vachieve these targets, we are taking a range of actions.
Specifically, in July 2022, we launched the Akashi Mega
DC, an automated distribution center with one of the largest
storage and shipment capacities in the Coca-Cola System inJapan. Our goal is to create a highly efficient distribution
network by gradually consolidating warehouse operations, suchas sorting, picking and inventory storage, traditionally conductedat each sales center. This will help us to deliver products tobusiness partners and vending machines while by reducing
long-distance transportation and GHG emissions. We are also
working to reduce plastic waste by replacing plastic with paper
straws and cup lids. We have implemented recycling programs,
such as CAN to CAN, horizontal recycling of collected aluminumcans from recycle boxes placed next to our vending machines
to use as materials of side part of cans, pallet-to-pallet, andshell-to-shell programs. These programs actively collect used-30%

Promote introduction ofbottle-to-bottle (horizontal) recycling
and 100% rPET bottles
Improve vending machine operationand optimize the value chain
CO2 emissions
to drop60%
approx.

per bottle 1

1 Assuming a switch from ordinary PET bottles to 100% rPET bottles

Reduction of GHG emissions

Aluminum CAN to CAN horizontal recycling

4P[PNH[PVUHUKHKHW[H[PVU[VJSPTH[LJOHUNLI`YLK\JPUNNYLLUOV\ZLNHZ./.LTPZZPVUZThe Coca-Cola System in Japan is committed to reducing
NYLLUOV\ZLNHZ./.LTPZZPVUZHJYVZZV\YZ\WWS`JOHPUZ
following in alignment with the Paris Agreement and scientificCoca-Cola Bottlers Japan Inc. Integrated Report 2022

evidence. Our ultimate goal is to achieve net zero GHG
LTPZZPVUZI`;VOLSWNL[[OLYL^LOH]LZL[medium-term CSV Goals, which aim to reduce GHG emissions

We collect usedaluminum cans

Recycled materials areused to manufacturealuminum bottles forbeverages

Bottle cans madefrom 100% recycled
aluminum are reusedfor products and soldCoca-Cola Bottlers Japan Inc. Integrated Report 2022

55

Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Governance

Financial /Corporate Information

56

Part 4

Risk Management
57

Business Resilience Strategy

59Managing Risk and Leveraging Opportunities

65

Disclosure Based on TCFD Recommendations

Kakogawa Parking, Akashi Truck Depot,
Kakogawa City in Hyogo Prefecture
Photo by Mitsuo Tajima
SCM Logistics Division
Coca-Cola Bottlers Japan Inc.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

57

Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Governance

Financial /Corporate Information

58

Business Resilience Strategy

Actively pursuing opportunities by empowering leaders
The world is changing at a lightning pace, creating complexities
that carry uncertainty and opportunity, and to grow we need tobe agile and innovative, creating an environment thatencourages our people to take informed risks. Our growthmindset and empowerment of our leaders to take smart risks,

Taking smart risks
for business resilience
Gerold Knight

enables us to actively chase opportunities. When we take smart
risks, we need to accept that things may not always work out
as planned, and when this happens, we need to embrace
failure and learn an important lesson: how to grow without
repeating the error.

Head of the Risk Management Senior Group
Coca-Cola Bottlers Japan Inc.

Aligning risk to strategy to enable rapid response in times of crisis

Creating growth opportunities through risk management
Resilience is a leadership orientation that forward-thinking
companies like ours have embraced in response to a disruptive
and volatile business environment. Our resilience orientation has
moved us away from a narrow crisis-response reflex to agility
and innovation, where we identify and respond to risks, absorb
shocks, and pivot to respond to new growth opportunities.
We are focused on identifying both current and over thehorizon risks with a focus on climate change; implementing

appropriate countermeasures and risk transfer strategies;
maintaining agility to leverage opportunities, while having strong
crisis response capabilities. To enhance our response, we havebrought together several specialist resilience streams thatenable us to leverage synergies to drive growth while protecting
the business. Ultimately being business resilient is acompetitive advantage.

In a business world subject to constant disruption, superior risk
management, embedded across our business, creates acompetitive advantage. Our Risk Management Group has
created a holistic resilience framework, embraced by ourpeople, focused on anticipating changes in our businessenvironment and with identifying emerging threats.
Our ongoing focus on traditional Coca-Cola system risks,such as product quality, combined with a focus on newer
topics such as climate change, TCFD reporting, ESG, cyber,and geopolitical changes create potential first-moveradvantages for us. Of priority is identifying and responding toclimate change risks, both physical and transitional, to ensurethat we understand and disclose mitigation plans, proposed
investments and the metrics and targets used to assess andmanage these climate-related risks and opportunities.
By aligning risk to strategy, we can exploit valuablebusiness insights. Supporting this are our strong response
processes in crisis management and business continuity, whichenable us in times of crisis, to find agile ways to make key
moves early and then accelerate into the new realities.

Fostering a culture in which we learn how to grow from failure
Most importantly, with smart risk taking we acknowledge that
we might fail, and this is okay if we learn from it. A smart risk isbased on sound risk evaluation, an understanding of market
sensitivities, and transparency. Transparency is a key pillar andinvolves stakeholder engagement, continuous communication,and seeking endorsement when required. A smart risk always

has a backup plan so we can quickly recover and learn from a
failure. Poor risk is the opposite and can be unlawful and as
integrity is a core value at CCBJI we will not take risks that areeither unlawful or could be seen as unlawful.
Together we are working together in an agile andinnovative way to imbed resilience into our business.

Adopting a “smart risk” approach according to the business environment
In business, risk management helps us to manage uncertainties
and we are all risk managers. These uncertainties can have
either positive or negative consequences and by making themost of the opportunities, while managing the downside, we
become a resilient business.
We know the speed at which new risks emerge in our
dynamic environment, so they and their potential impacts need
to be discovered and responded to fast. At the same time, wetake smart risks to grow as by being forward looking, aligningrisk to strategy, and taking the right type of risk we set
ourselves apart from our competitors.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

Smart risk is linked to our growth mindset and is anevolution in the way that we manage risk. Traditionally, likeother Japanese companies, we were focused on managing thedownside of risks and being prepared for disasters. We know
this is no longer enough, and as we innovate and grow, weneed to develop more sophisticated over the horizon
risk-identification processes while at the same timeencouraging informed risk taking. Supporting this we havecreated solid risk management practices and procedures that
we are embedding throughout the company.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

59

Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Managing Risk and Leveraging Opportunities

Governance

Financial /Corporate Information

60

Details of our risk management system
https://en.ccbji.co.jp/csv/risk/

Creating a resilient business
At CCBJH we have implemented an overarching businessresilience program that integrates the ways in which we manage
risk and opportunity to enable profitable growth; protect ourpeople and assets; enhance our capabilities to respond in acrisis; and the way we transfer risk through insurance.
Our Board of Directors has overall responsibility for risk
management and sets the risk appetite of the business. They
are closely involved in oversighting risks and the strategic
response to them, and monitoring management actions toachieve its strategic objectives.
In support, risk management is being firmly embedded
within our everyday business activities and culture. Our
Enterprise Risk Management (hereafter ERM) PDCA framework
is based on COSO*1 and ISO 31000 and provides a framework

to drive profitable growth by leveraging opportunities andpromoting appropriate risk-based decision-making, as well as
strong capabilities in the identification and response toforeseeable risks. Our business resilience programs are led by
our Head of the Risk Management Senior Group (HRM), who asa member of the ELT *2 works in close collaboration with thefunction heads and risk owners across our business on the
response to specific business risks. The HRM is tasked withmaintaining a wide-angled view of all business streams for
emergent risks and opportunities and through regular reporting
ensures that risk visibility is provided to the ELT and our Board.
*1 An abbreviation for Committee of Sponsoring Organizations of the Treadway
Commission. An organization that issues global frameworks for internal control.
*2 An abbreviation for Executive Leadership Team. Management organization in CCBJI
Group including CEO and function heads.

initiatives are constantly evaluated. The Audit and Supervisory
Committee are provided quarterly updates on the full programwith the Board of Directors receiving biannual updates. The
program is annually audited by our Internal Audit team andexternal auditors against global best practice.
During 2022, we continued our focus on strengthening the
integration of ERM and Smart Risk program into our corporate
culture through the creation and delivery of training andawareness courses. We have maintained the visibility of risks

and opportunities through monthly ELT dialogue and senior
manager participation in facilitated functional risk identification
and review sessions.
A robust crisis management program with associatedbusiness continuity plans provides us with the capability toeffectively respond to a crisis. These programs are subject toannual review with crisis training provided to our leadershipteams who are tested through interactive crisis simulations.

Enterprise Risk Management (ERM) processes
ELT Focus
ELT discusses risks and opportunities as part ofregular business routines. Senior leaders undertake
timely responses.

Business resilience program
Integrating Smart Risk into our business

Risk Management Forum

Annual Business Plan/
Strategic Business Plan

ELT Monitor

Deep Dives

Scenario Planning
Risks identified, assessed,
and understood

SystemComparisons

Smart Risk decisions made,and best practices shared

Active System
Risk Monitoring

External risk monitoring supported by regular discussions
within The Coca-Cola system in Japan.

BOD Oversight

Leadership and Oversight

Smart Risk
Culture Risk
Governance

Bottom up review through HRM facilitated sessions withsenior leaders to identify risks and mitigations together
with potential opportunities. 1:1 ELT deep dives provided
top down evaluation.

Functional Business
Reviews and ELT
1:1 Deep Dives

Risk Intelligence
In quarterly ELT updates, members engage in detailed
review and discussion to validate the key risks andimplemented mitigations.

Quarterly the HRM briefed the Committee on material
risks, management actions, and process compliance withthe risk management elements of regulatory Code.

Quarterly ELT
Risk Updates

Review by the Audit
and Supervisory
Committee

Enterprise risk management (ERM) systems and program
The ERM program incorporates a variety of elements thatenable us to ensure alignment to our business strategies,
objectives, and principles; drive integration in our strategic
direction, ethics and values; link into the business planning
cycle; continually monitor our internal and external environment
for factors that may change our risk profile and create

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

opportunities; and an annual evaluation of the type and amountof insurance we should purchase. In a hardening insurance
market, our approach to insurance risk transfer is influenced by
the availability of insurance cover and cost, measured against
the probability and magnitude of the relevant risks.
Our risks and the associated mitigation and response

Biannual briefings provided by the HRM ensuring fullvisibility of the business resilience processes.

Review by
Board of Directors

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

61

Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Governance

Financial /Corporate Information

62

Managing Risk and Leveraging Opportunities

Reportable risks
The cyclic review of our key risks involves an assessment of thelikelihood of their occurrence and their potential consequences
to confirm our level of exposure and evaluate the strategies tomanage them. The list does not include all risks that canultimately affect our Company as there are risks that are not yet
known to us, and risks currently evaluated to be immaterial that
could ultimately have an impact on our business or financial

performance. By leveraging our robust risk management
program, which is integrated into business routines andevaluates risks against our business and strategic priorities, we
remain vigilant to the uncertainty in our operating environmentand can react with agility. The program enables us to proactively
identify new risks and opportunities which enable us tounderstand threats to our business viability.

High risks
Risk category

People(attraction andretention)

High risks
Risk category

Commodity pricing

Macroeconomic

Description and potential impacts

Key mitigations

Risk of procurement costs increasing due tofluctuations in exchange rates, raw material
shortages, and commodity prices.

ҋ Mitigate the impact of exchange rate and productprice fluctuations through the uses of derivativetransactions
ҋ Procure raw materials at lower costs throughcollective multi system company purchases
leveraging Coca-Cola system

ҋ0UJYLHZLKJVZ[IHZL
ҋ9LK\JLKWYVK\J[Z\WWS`
ҋ3PTP[H[PVUZ[VWYVK\J[WVY[MVSPVRisk of volatile and challenging
macro-economic conditions caused by key
global events including conflict, inflation, andforeign currency fluctuations.
ҋ+L[LYPVYH[PVUVMMPUHUJPHSJVUKP[PVUZ
ҋ9LK\JLKJVUZ\TW[PVUZWLUKPUN
ҋ*OHUNLZPUJVUZ\TLYZWLUKPUNWH[[LYUZ

Risk of business activities being suspended,
and confidential information leaking caused bysystem failures or cyber incidents

Cyber security andsystem availability

Changing consumer
mindsetCoca-Cola Bottlers Japan Inc. Integrated Report 2022

ҋ3VZPUN[Y\Z[MYVTJVUZ\TLYZHUKJ\Z[VTLYZҋ+L[LYPVYH[PVUVMMPUHUJPHSJVUKP[PVUZ

Risk of changes in consumer preferencesJH\ZLKI`*6=0+ NYV^PUNJVUJLYUZV]LYsugar consumption and increased healthawarenessҋ(JX\PZP[PVUVYSVZZVMJVUZ\TLYIHZL
ҋ>PUUPUNVYSVZPUN[Y\Z[MYVTJVUZ\TLY
ҋ+PZJYPTPUH[VY`[H_H[PVUҋ Enhanced strategic and operational risk identification
enabling the group to grasp the changes inmacroeconomic landscape more quickly and prepare
better for the future by improving the ability to predict
the future demand and trends more accurately
ҋ Monitoring and responding to changes in status tocustomers’ business operations
ҋ Strong crisis response practices that focus on
employee, customer and consumer safety
ҋ Prepare the response plans to mitigate thedamages caused by system failures (such as, bysetting up backup sites overseas)ҋ0TWYV]PUNHUKZ[YLUN[OLUPUNZ`Z[LTZLJ\YP[`I`
proactive threat identification and conducting
simulation tests of cyberattacks
ҋ Complying with laws and regulations on information
management
ҋ Establishing internal regulations related to
information security supported by related employee
training programs
ҋ+L]LSVWHUKTHPU[HPUHZ`Z[LT^VYRMVYJL^P[O[OLability to respond to cyber incidents
ҋ Focus on product innovation and portfolio
expansion
ҋ Strengthen range of low and no calorie beverages.
ҋ+P]LYZPMPJH[PVUPUWHJRZPaLZ
ҋ Promote active lifestyles through consumer
engagement program

Description and potential impacts

Key mitigations

Risk of not being able to secure, retain anddevelop enough human resources and build
constructive relationships with labor unions
due to poor business performance and acompetitive employment environment.

ҋ0TWSLTLU[Z[YH[LNPJWLVWSLKL]LSVWTLU[WSHUZHUK
develop a new salary payment structureҋ Recruit diverse talent and commitment to people
development (including overseas)ҋ0TWSLTLU[\UTHUULKWSHU[VWLYH[PVUZVUSPULtransactions, and outsourcing of shipping operations
ҋ Enhance the workplace environment to improve
employee satisfaction
ҋ Strengthen communication between top management
and employeesҋ:SV^KV^UVYZ\ZWLUZPVUVMI\ZPULZZ
activities
ҋ:SV^KV^UVYZ\ZWLUZPVUVMZ\WWS`JOHPU
operations
ҋ0UHIPSP[`[VHJOPL]LNYV^[OWSHUZ

Risk of death and injury of employees anddamage to business facilities for production,
logistics and sales operations caused bysevere natural disasters, such as
earthquakes and floods
Natural disasters

Evolving commercial
and competitive
landscapeGrowth strategies

ҋ:SV^KV^UVYZ\ZWLUZPVUVMI\ZPULZZ
activities
ҋ:SV^KV^UVYZ\ZWLUZPVUVMZ\WWS`JOHPU
operations
ҋ9LK\JLKZHSLZVWWVY[\UP[PLZ
ҋ(KKP[PVUHSJVZ[ZYLX\PYLKMVYYLJV]LY`

Risk of changes in the retail market
environment led by a surge in online
ordering and a change in spending behavior
driven by the external macro environment.
ҋ(JX\PZP[PVUVYSVZZVMJVUZ\TLYIHZL
ҋ>PUUPUNVYSVZPUN[Y\Z[MYVTJVUZ\TLYZ
ҋ9LK\JLKZHSLZWYVMP[ҋ9LK\JLKWVY[MVSPVH]HPSHIPSP[`

Risk of failing to implement measures toimprove our competitive advantage andgrow the business (through businessintegration, capital investments, productdevelopment, etc.).
ҋ+L[LYPVYH[PVUVMMPUHUJPHSJVUKP[PVUZ
caused by loss due to impairment
ҋ3VZPUN[Y\Z[MYVTZOHYLOVSKLYZ

Financial risks

Risk of deterioration in financial conditions
cause by an increase in funding costs andretirement benefit obligations.
ҋ0UJYLHZLKJVZ[IHZL
ҋ3VZZVMZ[HRLOVSKLY[Y\Z[ҋ Strong Business Continuity Plan (BCP) and crisis
response capabilities enabling structured andstreamlined responses
ҋ Regular crisis and disaster response training andsimulations
ҋ0KLU[PMPLKHS[LYUH[P]LZOPWWPUNSVJH[PVUZHUKZLJ\YLtransportation capacity in preparation for a disasterthat damages the logistics centersҋ Secure earthquake coverageҋ9LKLZPNUVM+PZHZ[LY*VU[YVS/LHKX\HY[LY+*/8
model to enable enhanced regional response andspeed of responseҋ Enhancing the product portfolio and accelerated
productivity further to deliver products that meet theneeds of the retailers
ҋ,UOHUJPUN9PNO[,_LJ\[PVU+HPS`9,+[VKYP]Loperational excellenceҋ Expanding the online channels to respond to the
Z\YNLPU0U[LYUL[THPSVYKLYZҋ Building a robust system that enables the group to
respond readily and flexibly to various circumstancesҋ Formulate business integration strategies that takemultiple scenarios into consideration
ҋ:\WLY]PZPVUI`)VHYKVM+PYLJ[VYZHUK,_LJ\[P]LOfficers

ҋ Promote growth of cash flow through sales activities
to maintain and improve creditworthinessҋ Establish Pension Governance Committee tostrengthen the monitoring function of retirement
benefit obligations

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

63

Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Governance

Financial /Corporate Information

64

Managing Risk and Leveraging Opportunities

Medium risks
Risk category

Sustainability

Medium risks
Description and potential impacts

Key mitigations

Risk of increased stakeholder concerns
caused by caused by negative consumer
sentiment over the use of plastics and thetoughening of government regulations onplastics.

ҋ(JOPL]PUN*:=NVHSZJVU[YPI\[PUN[V[OLKL]LSVWTLU[of a sustainable society
ҋ “>VYSK>P[OV\[>HZ[L” initiatives including, increasing
the use rate of recycled PET resin, developing more
light-weighted packages and collecting used PET
bottles more effectively
ҋ7YVHJ[P]LYLZWVUZLPUSPUL^P[O,:.HUK;*-+
reporting requirementsҋ(JX\PZP[PVUVYSVZZVMJVUZ\TLYIHZL
ҋ>PUUPUNVYSVZPUN[Y\Z[MYVT
shareholders
ҋ0UJYLHZLVMJVZ[ZMVYYLZWVUKPUN[V
environmental and social issues
ҋ+PZJYPTPUH[VY`;H_H[PVU

The risk of product-related quality and foodsafety incidents.
Quality andfood safety

Regulatorycompliance andethicsManufacturing,logistics &infrastructure

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

ҋ3VZPUN[Y\Z[MYVTJVUZ\TLYZ
ҋ+LJSPULPULHYUPUNZK\L[VWYVK\J[YLJHSS
or mass disposal of defective products
ҋ3VZZVMVWWVY[\UP[PLZK\L[VJ\Z[VTLY
penalties

Risk of violations of laws, internal
regulations, and our code of ethicalconduct.
ҋ3VZZVMJ\Z[VTLYHUKJVUZ\TLY[Y\Z[ҋ+HTHNL[VIYHUKHUKJVYWVYH[L
reputation
ҋ9LN\SH[VY`WLUHS[PLZҋ,JVUVTPJSVZZ[OYV\NOMYH\K

Risk of the stable supply of goods being
impeded due to issues in production andlogistics operations, or changes in weather
and consumer behaviors
ҋ+YVWPUZHSLZ]VS\TLHUKYL]LU\Lҋ3VZPUN[Y\Z[MYVTJ\Z[VTLYZҋ Supplier quality audits and quality certifications
ҋ Employee awareness of quality control in all processes
from manufacturing to sales
ҋ Enhance the quality control and reporting system sothat consumer/customer complaints receive a timely
responseҋ Robust identification and response programs thatenable us to quickly and efficiently deal withquality/food safety issues

Risk category

Risk of raw material shortages including
water and agricultural products oroperational impacts due to adverse
weather associated with climate change.
Climate change

Health and safety

ҋ Strong Tone from the Top and continued internal
communication on corporate behaviors
ҋ Ethics & Compliance Committee meetings held
regularlyҋ4PUPTPaPUNLTWSV`LLMYH\KVWWVY[\UP[PLZI`YLI\PSKPUN
[OLI\ZPULZZWYVJLZZLZVYNHUPaH[PVUHSZ[Y\J[\YLHUK0;Z`Z[LTZ

ҋ Building a flexible supply system to respond tochanges in the market environment
ҋ0U]LZ[TLU[PUPUMYHZ[Y\J[\YLWYVK\J[PVUSPULZL[J[OH[will enable the group to respond to the increase indemand during the peak seasons more readily
ҋ Systems enhancements to enable timely sharing of
inventory statusҋ Strengthen supplier management and supervision

Description and potential impacts

Franchiserelationships

ҋ9LK\JLKJVTTVKP[`H]HPSHIPSP[`HUK
product supply
ҋ0UJYLHZLVMWYVK\J[PVUJVZ[Zҋ3PTP[H[PVUZ[VWYVK\J[WVY[MVSPV0TWHJ[[V
operations (e.g. damage to facilities)
ҋ+PZJYPTPUH[VY`[H_H[PVU

The risk of serious work-related health andsafety incidents (i.e. serious injury or death)
including transportation accidents.
ҋ+LH[OVYZLYPV\Z0UQ\Y`ҋ9LW\[H[PVUKHTHNLҋ7YVZLJ\[PVUHUKMPULZ

Risk related to our high dependency on, orchanges to our relationship with The Coca-Cola
Company and Coca-Cola Japan as
trademark owners in respect to contract /relationship terms and renewals, concentratepricing, support for product promotions.

Key mitigations

ҋ Focus on sustainable procurement
ҋ Engagement with stakeholders
ҋ Sourcing alternative suppliers, and strengthening
the selection of suppliers and their management by\[PSPaPUN[OLWLYMVYTHUJLKH[Hҋ(KQ\Z[[OLHTV\U[VMYH^TH[LYPHSZ[OH[HYLKPMMPJ\S[to procure, and shift to other raw materials whennecessaryҋ Crisis response and business continuity planningҋ Risk engineering in support of insurance coverage

ҋ*VU[PU\L0:66JJ\WH[PVUHS/LHS[OHUK
:HML[`*LY[PMPJH[PVU0U[LYUHS(\KP[6JJ\WH[PVUHS
/LHS[OHUK:HML[`Z[YH[LNPLZҋ Continue implementing mental health survey

ҋ Maintaining and improving cooperative relationships
with The Coca-Cola Company and Coca-Cola Japan

ҋ+LJYLHZLPUZHSLZMYVTHU`Z\ZWLUZPVUPU
the use of TM rights and/or decline inproduct development capabilities andbrand power.
ҋ0UJYLHZLK*6.:K\L[VJVUJLU[YH[LWYPJLҋ0UJYLHZLKZHSLZWYVTV[PVUL_WLUZLZPU
event of any decrease in sales support.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

65

Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Governance

Disclosure Based on TCFD Recommendations

https://en.ccbji.co.jp/csv/tcfd/

Climate change-related risks and opportunities and major actions

TCFD initiatives
In 2021, we published greenhouse gas (GHG) reduction targets
in alignment with the Paris Agreement and scientific evidence.
Our targets involve reducing Scope 1 and 2 emissions by 50%
and Scope 3 emissions by 30% by 2030 (compared to 2015),
while striving for carbon neutrality by 2050. In February 2022,
we endorsed the Task Force on Climate-related Financial

Disclosures (TCFD) recommendations. Furthermore, we joined
the TCFD Consortium and Climate Change Initiative, andimplemented these measures to cut GHG emissions. We willcontinue to advance our initiatives and disclosure for climatechange mitigation and adaptation through studies in line with
the TCFD framework.

Governance

Our new Sustainability Committee, comprised of ELT* members discusses and formulates
strategies on sustainability issues, including climate change. The final decisions on
strategies are made after approval by the Board of Directors.

Details on page 39
Sustainability Strategy

Strategy

We explore actions to address risks and opportunities revealed by scenario analysis.

Details on this page
TCFD Disclosure

Risk Management

The ELT meets weekly to discuss risks that arise in the course of business. Risks andopportunities are not only analyzed at the ELT’s weekly discussions, but also at quarterly
Risk Management Forums, where they are analyzed in detail with feedback provided backto the ELT and Audit and Supervisory Committee.

Details on page 59
Managing Risk andLeveraging Opportunities

Metrics & Targets

We have set our own medium- to long-term targets called CSV Goals, to reduce GHG
emissions across the entire supply chain by 2030 and achieve net zero emissions by 2050.
We take concrete actions toward achieving these targets while monitoring progress rates.

Details on page 41
Initiatives Based on CSV Goals

Transition Risks
Transition risks of high importance

Details

Main mitigation plans

Cost increase due to introduction ofcarbon pricing• Cost increase due to introduction ofcarbon tax and strengthening ofemissions trading system, etc.
• Increased costs due to price shifting ofcarbon tax at suppliers• Active adoption of recycled materials, promotionof weight reduction• Reduction of raw material consumption throughlighter containers/packages, etc.

Cost increase due toenergy conservation and
GHG emission regulations• Cost increase due to capital investment
for energy conservation and renewableenergy, etc.
• Increased procurement costs due toincreased production costs at suppliers• Reduce dependence on external power supply byintroducing renewable energy• Shift to use of alternative raw materials (in collaboration
with Coca-Cola Japan)

Cost increase due to tighter
plastics-related regulations• Increase in procurement costs forrecycled PET resin, etc.

• Shift to use of alternative materials active use ofrecycled materials• Promote lighter containers

Cost increase due to water
use regulations• Increase in procurement costs due tointroduction of groundwater tax• Reduce water usage• Strengthening cooperation with local governments

Decline in sales due to an
inadequate response to changes incustomer behavior• Decrease in sales due to shelf drop andcustomer defection from retailers, etc.

• Expansion of products in accordance with sustainableprocurement• Promote environmentally friendly products (e.g., 100%
recycled PET/labelless)

Loss of reputation among investors
and financial institutions due toinadequate response• Decrease in stock price andincrease in financing costs in caseof inadequate response• SBT certification and participation in RE100 (TBC)• Proactive and continuous disclosure and disseminationof information based on TCFD-related and other factors

Physical risks of high importance

Details

Main mitigation plans

Decrease in manufacturing efficiency
and manufacturing volumes due toextreme weather conditions• Increased procurement costs of
raw materials• Increased response costs due toincreased risk of infectious diseases• Diversification of procurement sources• Strengthening of BCP response

Business shutdown due to extreme
weather conditions• Impact of restoration cost and lost sales
due to shutdown of factories and othercompany-owned facilities due tohazardous weather conditions• Identify and prioritize wind and flood risks in
manufacturing sites, sales/distribution sites, and supply
chain, and enhance mitigation plans

Supply risk due to extreme weather
pattern changes• Increased procurement costs of
raw materials• Diversification of procurement sources• Collaboration with suppliers (e.g., development ofagricultural methods, TBC)

Increased asset deterioration andenergy costs due to extreme
weather pattern changes occurring
over time, etc.

• Increase in utility and other costs due torising temperatures• Reduce dependence on external power supply byintroducing renewable energy* An abbreviation for Executive Leadership Team. Management organization in CCBJI Group including CEO and function heads

Addressing climate change-related risks and opportunities
In 2021, our TCFD Working Group, collaborated with the Boardof Directors and each division to conduct a scenario analysis
for the year 2030, covering all regions. We considered both a
1.5°C/2°C and 4°C rise in global temperatures, respectively,
and studied actions to address the risks and opportunities
revealed by the analysis.
Our analysis considered that the 1.5/2°C scenario
assumes a society where climate change response progresses,

intensifying transition risks including regulatory risks, and where
social changes associated with the transition to a decarbonizedsociety are likely to affect business. In contrast, the 4°C
scenario assumes a society where climate change response isdelayed, natural disasters and other physical risks intensify, andwhere rising temperatures and other climate changes are likely
to significantly impact business.

Key risks and opportunities
Agriculture
Ingredients(Transition Risks)

Packaging

Manufacturing

Distribution

Sales Equipment

Cost increase due to introduction of carbon pricing
Cost increase due to energy conservation, GHG emission regulations
Cost increase due to tighter plastics-related regulations
Cost increase due to water use regulations

Acute(Physical Risks)

Decrease in manufacturing efficiency and manufacturing volumes due to extreme
weather conditions

Collection
Recycling

CustomerCommunity

Market (Transition Risks)
Decline in sales due to an
inadequate response tochanges in customer behavior(Physical Risks)

Supply risk due toextreme weather
pattern changes
Increased asset deterioration and energy costs due to precipitation, weather pattern changes, etc.

Resource
Efficiency(Opportunities)

Cost and GHG emissions reduction through efficient use of renewables

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

Physical Risks

Reputation (Transition Risks)

Opportunities

Loss of reputation among
investors and financial institutions
due to inadequate response

Opportunities of high importance

Details

Main mitigation plans

Customer demand increase for
products that contribute to energy
conservation and GHG reduction• Increase in sales due to environmentallyfriendly raw materials and packaging• Develop and expand environmentally friendly products(e.g., 100% recycled PET bottle, labelless, reusable,
package-less)

Changing customer preferences due
to global warming• Increase in sales of heat stroke
prevention and healthy beverages• Develop and promote heat stroke prevention andhealthy beverage products

Cost and GHG emissions reduction
through efficient use of renewables• Reduction of electricity costs and GHG
emissions by introducing renewableenergy and energy-saving equipment(facilities, logistics, etc.)• Cost reduction through enhanced
water efficiency• Installation of manufacturing equipment equipped withthe latest technology, Continuous improvement of
manufacturing processes and plant equipment throughmonitoring• Further promotion of water source replenishment
capacity improvement

Business shutdown due to extreme weather conditions

Chronic

66

Details of TCFD

The CCBJH Group considers Mitigation of and Adaptation to Climate Change as a material issue and iscarrying out initiatives based on the TCFD recommendations with reference to updated TCFD guidance
released in October 2021.

Regulations

Financial /Corporate Information

Product/Service (Opportunities)
Customer demand increase for products that
contribute to energy conservation and
GHG reduction
Changing customer preferences due toglobal warming

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

67

Introduction

Financial &Non-Financial Strategy

Value Creation Story

Sustainability

Risk Management

Governance

Financial /Corporate Information

68

Part 5Governance69

Corporate Governance Strategy

71

Corporate Governance

Tsuchiyu Kokeshi Doll, Tsuchiyu Hot Spring,
Fukushima City, Fukushima Prefecture
Photo by Eiji Ueno
East Japan Operation Division
Coca-Cola Bottlers Japan Vending Inc.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

69

Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Corporate Governance Strategy

Governance

Financial /Corporate Information70

Details of our corporate governancehttps://en.ccbj-holdings.com/corporate/governance/

Building a strong foundation
as a trusted and honest company
Tomokazu Usagawa
Executive Officer and CLO (Chief Legal Officer)
Coca-Cola Bottlers Japan Inc.

Boosting sustainable growth: Strengthening corporate governance throughenhanced effectiveness of the Board of Directors
Since the the business integration in 2017, we have implemented
several initiatives to strengthen our corporate governance. As acompany with an Audit & Supervisory Committee, we havefocused on enhancing the effectiveness of the Board of Directors
and reviewing the system for promoting active discussion. We
have also improved the audit and supervisory functions while
increasing operational flexibility. To align our directors’ interests withthose of our shareholders, we introduced a performance-based
stock incentive system in 2018. This will increase their motivation
to contribute to medium- to long-term corporate value and stock
price growth. We are also implementing measures andaddressing revisions based on Japan’s Corporate GovernanceCode. We will continue to promote initiatives to enhance ourcorporate governance system.

Enhancing corporate governance: Key initiatives and progress made2016

࡛ Adopted a company with Audit & Supervisory Committee structure

2017

࡛Established a Board of Directors system and an executive officer system

2018

࡛Reorganized the Group࡛Examined the pros and cons of cross-shareholdings and clarified strategy
࡛Introduced a performance-linked stock-based incentive compensation
system for executive officers
࡛Began analyzing and evaluating the effectiveness of the Board of Directors

2019࡛Reorganized the Group, and reviewed the executive officer system andreduced the number of officers
࡛Conducted a fundamental review of the Board of Directors Structure
Reduced the number of executive directors from four to two
Increased the number of outside directors from four to six
Hired three female directors(outside director ratio: 67%, female director ratio: 33%)
࡛Clarified dividend policy

2020

࡛Conducted a review of Board of Directors Structure
Increased the number of outside directors from six to seven(outside director ratio: 78%)2021

࡛Revised internal Corporate Governance Regulations(Strengthened corporate governance for transition to Prime Market)
࡛Established a skills matrix for the Board of Directors

2022࡛Introduced a chief officer system
࡛Transitioned to the Tokyo Stock Exchange Prime Market

Building a strong corporate foundation for sustainable growth:
The power of proactive legal support
Our vision is to continue to be the partner of choice for all
customers. We strive to be an honest and trustworthy company
for all our stakeholders, including customers, business
partners, shareholders, local communities, and employees.
In order to achieve this, as a division that plays a crucial rolein establishing a solid corporate foundation, our Legal Division has
three functions: Corporate Governance, Ethics and Compliance,and so-called Legal Affairs, and promote various initiatives in athree-pronged manner.
Another part of our vision is to triumph in the market
through sustainable growth. Recently, we have been facing

rapid changes in the business environment. To triumph andgrow in today’s market, we must continuously evolve as acompany. This type of sustainable growth and evolution is only
possible when there is a solid corporate foundation in place. To
achieve this, we aim to be a proactive legal division that
implements proactive corporate governance. This means not
only acting as a guardian but also demonstrating creation andnavigation skills to anticipate environmental changes andsupport appropriate risk-taking for bold strategies. We actively
seek opportunities for dialogue with stakeholders to increase
understanding and collaboration.

Stimulating discussion for sustainable growth through institutional design thatemphasizes diversity and separation of functions
Our company as an Audit and Supervisory Committee, that asa Board Committee, strengthens corporate governance. Our
goal is to increase management soundness, transparency,
efficiency, and enhance medium- to long-term corporate value
as well as shareholder value. Our Board of Directors and Audit& Supervisory Committee are diverse and include multiple
independent outside directors who facilitate transparent, fair,swift, and bold decision-making. These outside directors also
have voting rights and can state their opinions on director
nominations, remuneration, and other such important mattersat the General Meeting of Shareholders, further strengthening

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

management oversight. Additionally, we have introduced an
executive officer system to separate decision making andmanagement oversight functions from business executionfunction, allowing for swift execution while the Board focuseson critical management issues while at the same time ensuring
appropriate collaboration between directors and executive
officers. In this way, we have established a system that allows
the Board of Directors to concentrate on deliberation anddecision-making on critical management issues while executive
officers make management decisions on other matters andengage in swift business execution.

Driving corporate value: The power of stakeholder dialogue and collaboration
The cornerstone of our corporate governance is ourcommitment to honesty and trust, which we believe is essential
to building a strong foundation for sustainable growth. By
implementing a robust governance framework, our goal is tofoster open communication with our stakeholders, strengthen
management practices, and enhance transparency to drive
corporate value and increase shareholder value over the
medium to long term.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

71

Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Corporate Governance (As of March 28, 2023)

Risk Management

Governance

Financial /Corporate Information

72

Details of our corporate governancehttps://en.ccbj-holdings.com/corporate/governance/

Fundamentals of corporate governance

Board of Directors

The basic policy of CCBJH is to increase management quality,transparency, and efficiency, while striving to enhance medium- andlong-term corporate value.
To further strengthen the governance structure, the Company
has put in place an audit and supervisory committee structure. The
Audit & Supervisory Committee, which is responsible for theCompany’s auditing, consists of multiple independent outside
directors. The Company’s management oversight function is further
strengthened by granting to these outside directors serving as Audit& Supervisory Committee members voting rights at meetings of theBoard of Directors and the right to state opinions at the General
Meeting of Shareholders on matters such as the nomination andremuneration of directors.
In addition, the Company has adopted the executive officer system
for the purpose of separating decision-making and management
oversight from business execution. By delegating some important
decisions on business execution to executive officers, the Company
endeavors to enrich discussion of particularly important matters at
meetings of the Board of Directors and expedite management
decision-making by the management team.

Corporate governance system
General Meeting of Shareholders
Election / Dismissal

Election / Dismissal

Election / Dismissal

Reporting / Stating opinion

Board of Directors

ReportingDirectors (excluding Directors serving on
the Audit & Supervisory Committee)

Directors serving on
the Audit & Supervisory Committee
Reporting executionof operation

Representative Directors
ReportingInternal Audit Office
Auditing

Auditing

Supervision / Reporting
Exchange opinions
Reporting
Cooperation
Auditing

Executive Officers
Group Companies

DivisionsAudit & Supervisory Committee*

Financial / Accounting Auditor

Selection / Supervision /Delegation of execution ofimportant operation

Reporting
Auditing / Determining proposals for election or dismissal
Cooperation* Consisting of outside directors serving on the Audit & Supervisory Committee, including independent outside directors

Structure of major meetings attended by the management team
When making decisions on important matters of the Company, the President and the Vice President with representative rights, or either of these andheads of functions including executive officers, engage in deliberation within major meeting structures and connect this to prompt decision making.
Examples of major meeting structures
ELT*1 Meeting

This meeting discusses major issues and strategic directions that span the entire company or multiple units.
In addition, the meeting reviews material implied risks and evaluates ways to control and mitigate these risks.

Executive S&OP*2 Meeting

Medium- to long-term strategic business decisions are made based on a series of demand and supply planningand financial information to optimize the entire supply chain in conjunction with sales operations.

Capital Committee

This committee conducts deliberation and progress management concerning capital investment plans, deliberation
and approval of capital investment projects, and post-execution verification, etc. of capital investments, for the
purpose of appropriate capital investment management.

SPVR*3 Operational Meeting

This committee is established for a regular reporting to the management about the major activities and strategies ofCoca-Cola Bottlers Japan Business Services Inc. Also, this committee evaluates the consistency of IT investment
based on IT strategy and discusses IT policy and DX projects of the entire group.

Ethics and Compliance
Committee

This committee engages in activities including awareness and education activities related to ethics and compliance,
operation of consultation desks, handling of other compliance-related cases, and examination and implementationof measures to prevent recurrence of problems.

Sustainability Committee

This committee discusses and puts together policies and strategies related to various sustainability-related issues,particularly climate change.

*1 Executive Leadership Team

*2 Sales and Operations Planning

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

The Company’s Board of Directors consists of nine directors,
including multiple independent outside directors, and holds regularmeetings once every three months in principle and extraordinary
meetings as needed. The Board of Directors resolves mattersconcerning basic management policies and other importantbusiness issues, as well as matters prescribed by law and by the

Articles of Incorporation and receives reports on the execution ofbusiness from directors. The Company also delegates a part ofdecision-making on important matters of business execution to
directors to further enhance deliberations on matters of special
importance in the Board of Directors and to speed up decisions by
the management team.

Evaluation of the effectiveness of the Board of Directors
Each year, the Board of Directors of the Company evaluates andanalyzes its effectiveness based on self-evaluation by directors
regarding the operation, support system, composition, etc.
Based on the self-evaluation conducted by the directors withthe advice of an external third-party organization, we have received
generally positive evaluations on the issues identified in theprevious year, such as business updates by major divisions andefforts to explain the contents of deliberations in advance, and we

recognize that the effectiveness of the Board of Directors as awhole is improving.
It has been confirmed that the Company will continue topromote ongoing efforts to further enhance discussions at theBoard of Directors meetings, and to proactively improve operational
aspects of the Board of Directors to further enhance and deepen
discussions in line with changes in the business environment.

Audit & Supervisory Committee
The Audit & Supervisory Committee, which is responsible for
auditing the Company, consists of four members, all of whom are
Outside Directors (Audit & Supervisory Committee members),
including several independent directors, and meet once every threemonths in principle, with special meetings as needed. In accordancewith the Audit & Supervisory Committee Standards for Audits basedon relevant laws and the Articles of Incorporation, the Audit &Supervisory Committee audits the execution of duties by directors,
executive officers, and employees by attending meetings of theBoard of Directors and examining the results of audits conductedby the division in charge of internal audits and the accounting auditor.
Audit Status
The Audit & Supervisory Committee’s main concerns are theformulation of audit policy, preparation of internal system, andconfirmation of its operation, audit report preparation,

reappointment of accounting auditors, agreement on remuneration
for accounting auditors, and providing opinions for the determinationof the appointment and remuneration of directors and others. The
Audit & Supervisory Committee met five times in 2022.
The members of the Audit & Supervisory Committee convey
their audit opinions objectively and neutrally using their broad
expertise and abundant experience, and they communicate theirforthright thoughts at the Board of Directors and the Audit &Supervisory Committee meetings. In addition, we believe that themembers of the Audit & Supervisory Committee are fully exercising
their supervisory and oversight function with respect to theCompany’s management by regularly exchanging perspectives on
the content with the Representative Director. The Audit & Supervisory
Committee includes a member who has abundant experience andknowledge in finance, accounting and accounting procedures,
including management of a finance-related consulting company.

*3 Systems & Processes + Value Realization Steering

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

73

Introduction

Financial &Non-Financial Strategy

Value Creation Story

Sustainability

Risk Management

Financial /Corporate Information

Governance74

Corporate Governance (As of March 28, 2023)

Executive compensation system

Compensation structure for executive directors (or directors)

Basic policy
CCBJH Group have designed our executive compensation system on the basis of the following policy. Executives subject to the system in
2022 are two executive directors, seven supervisory officers (directors who are Audit & Supervisory Committee members and outside
directors who are not Audit and Supervisory Committee members), and 10 executive officers.

Fixed compensation
Basic compensation

ҋ4VU[OS`WH`TLU[VMHUHTV\U[KL[LYTPULKIHZLKVUYLZWVUZPIPSP[PLZ

Retirement paymentsҋ(UHTV\U[LX\HS[V VMIHZPJJVTWLUZH[PVUPZHJJ\T\SH[LKL]LY``LHY^P[O[OLJ\T\SH[P]LHTV\U[calculated and paid upon retirement.
ҋ0U[OLL]LU[[OH[[OLPUKP]PK\HSOHZJH\ZLKZLYPV\ZOHYT[V[OL**)1/.YV\WVYOHZILLUZ\IQLJ[LK[V
disciplinary measures, the Company may reduce the amount paid or withhold payment. In addition, a
special increase may be made in recognition of particularly meritorious service. Reduction of amounts,
non-payment, and special increases undergo approval by the Board of Directors based on deliberationby the Audit & Supervisory Committee.

Overview of the executive compensation system
Targets

Basic policy

Decision-making process

Level

Executive directors
Executive officers

ҋ;OL*VTWHU`ZL[Z[OLSL]LSHUK
composition of compensation to enable
the hiring and retention of talented humanresources who are diverse in terms ofnationality, experience, etc.
ҋThe composition ratio will emphasize
performance-based compensation toprovide sufficient incentive to achieve
profitable growth.
ҋ;OLZ`Z[LT^PSSWYVTV[LPTWYV]LTLU[PU
medium- to long-term corporate value anda shared awareness of profit withshareholders.

ҋ0UVYKLY[VPUJYLHZL[OL[YHUZWHYLUJ`HUK
objectivity in compensation decision procedures,the content of compensation is discussed by the
Audit & Supervisory Committee, composed ofonly outside directors, based on policies
concerning the determination of compensation for
directors and within the total amount determinedat the General Meeting of Shareholders. Throughresolution of the Board of Directors, the setting ofcompensation is delegated to the representative
director, who determines the compensation foreach executive director, including the amount of
performance-based compensation.

ҋ*VTWLUZH[PVUPZKLJPKLKPUHJJVYKHUJL
with scale of responsibilities, utilizing datafrom compensation surveys performed byexternal research organizations and taking
into account the level of compensation
provided at companies such as domestic
and overseas similarly-sized companies incomparable industries, with the intent ofproviding a level of compensation thatenables recruitment and retention oftalented people who are highly diverse interms of nationality, experience, etc.

ҋ*VTWLUZH[PVUSL]LSHUKZ[Y\J[\YLIHZLKon role in management supervision andauditing.

ҋ*VTWLUZH[PVUMVYKPYLJ[VYZ^OVHYL(\KP[ Supervisory Committee members is proposed to
the Audit & Supervisory Committee and isdetermined through deliberation with directors
who are Audit & Supervisory Committee
members, within the total amount determined at
the General Meeting of Shareholders.
ҋ;OYV\NOYLZVS\[PVUVM[OL)VHYKVM+PYLJ[VYZ
compensation for outside directors who are not
Audit & Supervisory Committee members isdeliberated by the Audit & Supervisory
Committee based on policies concerning thedetermination of compensation for directors. The
setting of compensation is delegated to therepresentative director and president, whodetermines compensation within the total amountdetermined at the General Meeting of Shareholders.

ҋ;OL*VTWHU`THRLZ\ZLVM
compensation survey data from outside
expert organizations, etc. with reference
to compensation levels in domestic
companies of similar scale, and sets
levels in accordance with roles.

Supervisory officers

Compensation system for executive directors and executive officers
Compensation for executive directors and executive officers is composed of fixed compensation and variable compensation that varies withfactors such as corporate performance, to reflect responsibilities and contribution to corporate performance. The standard amount ofcompensation is set according to the scale of responsibilities. The larger the responsibilities, the higher the percentage of variable compensation.

Range of standard amounts of compensation: Image when basic compensation is set to 100
Fixed compensation
Basic compensation

Variable compensation

Retirement payments

100

10

Annual bonus

Around 30 to 85

Long-term incentives*

Around 15 to 100* Performance Share Units (PSU) and Restricted Stock Units (RSU)

Image of compensation structure (in case of Representative Director & President)
Fixed compensation

Variable compensation
Annual bonusҋ Provided as an incentive for achieving performance targets for each fiscal year at a certain time each year.
ҋ The target amount is set more or less in the range of 30% to 85% of base salary depending on their
responsibilities.
ҋ The amount of payment varies in the range of 0% to 150% of the target amount depending on the achievementof performance targets in each fiscal year (company-wide performance and individual evaluations).
ҋ Business income, sales volume, and revenue have been adopted as performance indicators to drive motivation
for achieving profitable growth in accordance with the policy for determining officer compensation, etc.

Long-term incentives*2

ҋ Two types of stock-based compensation systems, (1) PSU and (2) RSU, are adopted as long-term
incentives.
ҋ The standard amount for long-term incentives overall ((1)+(2)) is set more or less at 15% to 100% of basic
compensation, according to the scale of responsibilities. The PSU standard amount is set to 50% and the
RSU standard amount is set to 50% of the standard amount.
ҋ With regard to (2) RSU, additional grants (special RSU) for the purpose of retention and other factors may
be made for directors in addition to the above-mentioned basic RSU amount up to the compensation
limit detailed on the right, if deemed necessary by the Audit & Supervisory Committee.

(1) PSUҋ Provided as an incentive for achieving medium- to long-term performance targets.
ҋ The number of shares to be issued is determined within the range of 0% to 150% of the PSU standard
amount depending on the achievement of performance targets (only considering company-wide
performance) three years after the share units have been granted (with half of the shares to be issued
paid in cash for the purpose of allocating funds for the payment of tax obligations).
ҋ Consolidated ROE and growth rate of consolidated net revenue are used as metrics for creating
motivation for medium- to long-term improvement of corporate value in accordance with the policy for
determining directors’ compensation, etc.

(2) RSUҋ Provided for the purpose of aligning interests with shareholders, creating incentives to increase
corporate value, and strengthening retention of talented people.
ҋ A predetermined number of shares is issued at the time of retirement (with half of the shares to beissued paid in cash for the purpose of allocating funds for the payment of tax obligations).

Payment of compensation to directors in 2022
Directors’ Compensation

69%

31%

Under minimum
payment
Under standard
payment
Under maximum
payment

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

37%
30%

Total amount by type of compensation, etc. (million yen)

Executive category

Total amount ofcompensation, etc.
(million yen)

Basiccompensation*3

Retirement
payments

Annual bonus

Long-term
incentives*4

Other*5

Directors (except Audit &Supervisory Committee members)[of which, outside directors]

1,013
[43]

540
[43]

21
[—]

181
[—]

250
[—]

21
[—]

5
[3]

Directors (Audit & Supervisory
Committee members)[of which, outside directors]

72
[72]

72
[72]

—
[—]

—
[—]

—
[—]

—
[—]

4
[4]

Total
[of which, outside directors]

1,085
[115]

611
[115]

21
[—]

181
[—]

250
[—]

21
[—]

9
[7]

Number of
eligible directors

Total amount of compensation, etc. to persons for which total amount of compensation, etc. is 100 million yen or more
Name

RSU

The following are upper limits for thecompensation listed at left that is paid
to directors.
Compensation framework for directors(excluding directors who are Audit &Supervisory Committee members): Up
to an amount limited to 1,800,000
shares per year multiplied by themarket price at the time granted(approved through resolution of
Proposal No.5 at the 2022 General
Meeting of Shareholders of theCompany). (Number of directors at thetime of the resolution, excluding
directors who are Audit & Supervisory
Committee members: 5)*1 With regard to fringe benefits, the Company pays compensation for differences in tax rates between Japan and other countries, housing allowances, etc. based on CCBJHGroup internal rules, deliberated by the Audit & Supervisory Committee and approved by the Board of Directors, to support international assignments.
*2 At the 2022 General Meeting of Shareholders (held on March 28, 2023, Proposal No. 5), the introduction of a new long-term incentive (stock-based compensation) system wasapproved. Under this system, the Company’s shares are acquired through a trust funded by the money contributed by the Company, and these shares are issued to executive
directors. The maximum amount is 2,880 million yen in total for three fiscal years, and the maximum number of shares is 1,800,000 shares for those three fiscal years. There were
five directors (including two executive directors) as of the conclusion of the General Meeting of Shareholders, excluding directors who are Audit & Supervisory Committee Members.

Variable compensation

Base salary &retirement payments

The following are upper limits for thecompensation listed at left that is paid to
directors.
Limit on director compensation(excluding directors who are Audit &Supervisory Committee members): 850
million yen/year (approved throughresolution of Proposal No. 5 at the 2019
General Meeting of Shareholders of theCompany). (Number of directors at thetime of the resolution, excluding directors
who are Audit & Supervisory Committee
members: 5)
In case where the Audit & Supervisory
Committee has deliberated and deemed
it necessary, housing allowances andother fringe benefits may be paid within
the limit of 850 million yen*1.

Annual bonus &PSU at base amount

63%
70%

Annual bonus &PSU at maximum

Executive
category

Total amount by type of compensation, etc. (million yen)
Basiccompensation*3

Retirement
payments

Annual bonus

Long-term
incentives*4

Other*5

Total amount ofcompensation, etc.
(million yen)

Calin Dragan

Representative
Directors

317

14

127

182

14

655

Bjorn Ivar Ulgenes

Representative
Directors

179

7

53

68

7

315

*3 Basic compensation includes amount for fringe benefits (compensation for differences in tax rates between Japan and other countries, housing allowance, etc.), etc.
*4 Long-term incentives include PSU, RSU, and special RSU.
*5 Other refers to retention awards. Considering compensation levels in each country, rising prices, and the disadvantages caused by the differences between Japan and othercountries arising from the rapid depreciation of the yen, we paid a total of 21 million yen in cash as a retention award for 2022 in March 2023 to maintain motivation to leadthe transformation. The Audit and Supervisory Committee discussed and reviewed the appropriateness of the payment, and has deemed to be reasonable.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

75

Introduction

Financial &Non-Financial Strategy

Value Creation Story

Sustainability

Risk Management

Corporate Governance (As of March 28, 2023)

Financial /Corporate Information

Governance76

Details of our Management
https://en.ccbj-holdings.com/corporate/management/

Board Members

Attribution of Board members

Directors

Outside Directors

Executive
directors

Outsidedirectors

Independent
directors

22%

78%

56%

2

7

5

Outside directors in
Audit & Supervisory
Committee

Female directors

100%

33%

4

3

Nationalities

Age/Generation
40s

22%

70s

22%

6

Average58

years old

60s

11%

50s

44%
Calin Dragan
Representative Director, President
Calin Dragan has nearly three decades ofexperience working for Coca-Cola bottlers
globally, including Japan. Previously, heserved as President of The Coca-Cola
Company Bottling Investments Group.

Bjorn Ivar Ulgenes
Representative Director andVice President, CFO

Hiroko Wada
Outside Director
Independent Director

Bjorn Ivar Ulgenes has considerable financial
experience in Europe, the Middle East, Africa
and the Coca-Cola System in Japan.
Previously, he served as Deputy FinanceDirector, Central, East & West Africa Group,
The Coca-Cola Company.

Hiroko Wada has a wealth of experience inmarketing, management, and organizational / HRdevelopment in the consumer goods industry.
Previously, she has served as an executive
officer for The Procter & Gamble Company(U.S.) as well as CEO of Dyson Ltd. and Toys
“R” Us Japan, Ltd.

Outside Directors

Hirokazu Yamura
Outside Director
Independent Director

Celso Guiotoko
Outside Director
Independent Director

Hirokazu Yamura has worked for Coca-Cola
Bottlers Japan Inc. for around 15 years.
Currently, he serves as President and CEO ofMichinoku Coca-Cola Bottling Co., Ltd.

Celso Guiotoko has experience in IT andsupply chain with multinational corporations.
He has abundant management experienceand audit experience at Nissan Motor andNishimoto.

Hiroshi Yoshioka
Outside Director (serving on the Audit &Supervisory Committee)
Independent Director
Hiroshi Yoshioka developed management
experience and global knowledge at Sonyand previously served as an outside directorof Coca-Cola East Japan.

Assumptionof officeTerm ofoffice(Year)

Outsidedirectors

Audit &
Supervisory
Committee
members

Independent
directors

Calin Dragan

March 2019

1

—

—

—

Bjorn Ivar Ulgenes

March 2019

1

—

—

—

Hiroko Wada

March 20191—

Hirokazu Yamura

March 2020

1—

Celso Guiotoko

March 2023

1—

Hiroshi Yoshioka

March 2023

2

Nami Hamada

March 20192

Stacy Apter*

March 2023

2—

Sanket Ray*

March 2023

2—

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

Globalbusiness

Food andbeverageindustry

Finance/
Audit

Sustainability
and CSV* Stacy Apter and Sanket Ray were appointed as Outside Directors serving on the Audit & Supervisory Committee at the 2022 Ordinary General Meeting of Shareholders held in March.
Note: Irial Finan and Vamsi Mohan Thati resigned as Outside Directors serving on the Audit & Supervisory Committee at the 2022 Ordinary General Meeting of Shareholders heldin March.

The Company assesses the expertise and experience possessed by directors based on the following criteria.
Items

Nami Hamada has a wealth of experience infinance and accounting, including leading her
own financial consulting firm. She has servedin management positions at Lehman
Brothers Japan Inc. and as an outside
director of Shimadzu Corporation and
MetLife Insurance K.K.

Corporate
management

Criteria for determining the necessary skills possessed by directors

Outside Directors

Nami Hamada
Outside Director (serving on the Audit &Supervisory Committee)
Independent Director

SkillsName

Stacy Apter
Outside Director (serving on the Audit &Supervisory Committee)

Sanket Ray
Outside Director (serving on the Audit &Supervisory Committee)

Stacy Apter has displayed strong leadership,particularly in the areas of global financial risk
supervision and corporate risk management,at the Coca-Cola Company and has global
management experience, including in terms
of providing support to the Board of
Directors. She currently serves as Vice
President, Treasurer and Corporate Financeat the Coca-Cola Company.

Sanket Ray has displayed strong leadership,particularly in commercial roles, at The
Coca-Cola Company and has global
management experience in the Asia region.
He currently serves as president of thecompany’s India and Southwest Asia Unit.

Criteria for(Applicable)

Corporate management• A person who has experience as a representative such as CEO or COO.

Global business• A person who has global business or equivalent knowledge as a division director or above.

Food and beverage industry• A person who has experience as a division director or above in a company handling beverages or food products,
or who has equivalent knowledge.

Finance/Audit

Sustainability and CSV• A person who has experience as a division director or above in a Finance / Accounting Division, or who has equivalent knowledge.
• A person who has a national qualification in finance and accounting, such as a CPA.

• A person who has experience as a director or above in Sustainability / CSV Division, or who has equivalent knowledge.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

77

Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Governance

Financial /Corporate Information

78

Corporate Governance (As of March 28, 2023)

Appointment of outside directors

Policy regarding cross-shareholdings

Three of the Company’s five directors (excluding directors who are
Audit & Supervisory Committee members), and the four directors
who are Audit & Supervisory Committee members, are outside
directors.
As outside directors, the Company nominates persons whoare considered to contribute significantly to increasing thecorporate value of the Company. Moreover, if it has been
determined through investigation by the Company within thescope of reason that none of the criteria apply to the Company’s
outside directors, the Company will deem outside directors topossess sufficient independence from the Company.

Standards for determination of independence of outside directors
If none of the criteria below apply, the Company considers the director to havesufficient independence.
ҋ(ULTWSV`LLHUKVYL_LJ\[P]LVM[OL*VTWHU`HUKVYHZ\IZPKPHY`^P[OPU
the past 10 yearsҋ(WLYZVUHUKVYL_LJ\[P]L^OVOHKHZPNUPMPJHU[I\ZPULZZYLSH[PVUZOPW^P[O
the Company within the past one year*1
ҋ(ULTWSV`LLHUKVYL_LJ\[P]LVM[OLJVTWHU`^OVOHKHZPNUPMPJHU[business relationship with the Company within the past one year*1ҋ(JVUZ\S[HU[JLY[PMPLKW\ISPJHJJV\U[HU[H[[VYUL`L[J^OVOHZYLJLP]LKsignificant compensation from the Company other than executive
compensation within the past one year*2
ҋ(ULU[P[`VYL_LJ\[P]L[OLYLVM^OVOHZYLJLP]LKHZPNUPMPJHU[KVUH[PVUMYVT
the Company within the past one year*2ҋ(JSVZLYLSH[P]LVMHU`VM[OLHIV]L*3*1 If the transaction between the Company and the person and/or thecompany exceeds 2% of the Company’s consolidated revenue in thelatest fiscal year, this will be considered significant*2 If the annual amount of compensation or donation to the person/entity
exceeds JPY 10 million, this will be considered significant*3 Within the second degree of kinshipIn principle, it is the Company’s policy to refrain fromcross-shareholdings. However, there are cases in which theCompany acquires and holds such shares to create business
opportunities and maintain and strengthen its relationships with
Number of companies and the amount recorded in the balance sheet
Number of companies

Independent
outsidedirectors

Hiroko Wada
Outside Director

105

2,909

Stocks other than unlisted stocks

45

8,358

Brands that the Company increased the number of shares in 2022

Board meeting 7/7—

Unlisted stocks

Attendance

Board meeting 7/7

Celso Guiotoko
Outside Director

The Company has appointed Celso Guiotoko as a director (outside director) in order for him to utilize, for the management of theCompany, the considerable experiences and global knowledge he has gained thus far at Nissan Motor Co., Ltd. and NishimotoCo., Ltd. As no special vested interest exists between the individual and the Company, the Company deems that no risk of
conflict of interest with general shareholders exists and has appointed the individual as an independent director.

Attendance

Board meeting 7/7

Hiroshi Yoshioka has extensive management experience and global knowledge cultivated at Coca-Cola Bottler in Japan and at
Sony Corporation. He is expected to offer advice based on his abundant experience as a company manager and his knowledge,in areas of important management decisions of the Company, response to foreseeable risks, internal control systems, etc.
Accordingly, the Company has appointed him as an outside director who is an Audit & Supervisory Committee member. As no
special vested interest exists between the individual and the Company, the Company deems that no risk of conflict of interest
with general shareholders exists and has appointed the individual as an independent director.

Hiroshi Yoshioka
Outside Director(serving on the Audit &Supervisory Committee)
Attendance

Board meeting 7/7
Nami Hamada
Outside Director(serving on the Audit &Supervisory Committee)

Nami Hamada has extensive experience in finance and accounting, including managing a finance-related consulting company
herself, and has abundant experience and global insights cultivated on the corporate management team of Lehman Brothers
Japan as well as management oversight experience as an outside director of SHIMADZU CORPORATION and MetLife Insurance
K.K. She is expected to offer advice based on her abundant experience as a company manager and her knowledge in the field offinance, in areas of important management decisions, response to foreseeable risks, internal control systems, etc. Accordingly,
the Company has appointed her as an outside director who is an Audit & Supervisory Committee member. As no special vested
interest exists between the individual and the Company, the Company deems that no risk of conflict of interest with generalshareholders exists and has appointed the individual as an independent director.

Attendance

Board meeting 7/7
Audit and Supervisory
Committee meeting 5/5
Stacy Apter
Outside Director(serving on the Audit &Supervisory Committee)
New appointment—

Sanket Ray
Outside Director(serving on the Audit &Supervisory Committee)
New appointment—

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

Stocks other than unlisted stocks

The Company proposes to appoint Hirokazu Yamura as a director (outside director) with the expectation that he will apply his
wealth of management expertise and global understanding obtained as Representative Director & President of Michinoku
Coca-Cola Bottling Co., Ltd. While the Company has the business relationship noted below with the corporate group of said
company, the transaction value is small and transaction prices and other conditions are conducted under appropriate conditions inthe same manner as with other business partners. The Company believes that its free business activities will not be hindered by the
corporate group of said company. Accordingly, as there is no risk of significant impact from said company, the Company deems
that no risk of conflict of interest with general shareholders exists and has appointed the individual as an independent director.
Relationship with the Company: The Company has a business relationship with Michinoku Coca-Cola Bottling Co., Ltd. that
includes buying and selling of products. (Sales, etc.: 0.4% of the consolidated revenue of the Company; Purchasing, etc.: 0.3%of the consolidated revenue of said company)

Hirokazu Yamura
Outside Director

Total amount spent to increase
the number of shares held (million yen)

Number of companies

13

Stacy Apter is Vice President, Treasurer and Corporate Finance at The Coca-Cola Company. She has displayed strong
leadership, particularly in the areas of global financial risk supervision and corporate risk management and has abundant
management experience as part of the company’s management team, including in terms of providing support to the Board of
Directors. She is expected to offer advice based on her abundant experience in finance and risk management, in areas ofimportant management decisions, response to foreseeable risks, internal control systems, etc. Accordingly, the Company has
appointed her as an outside director who is an Audit & Supervisory Committee member.
Relationship with the Company: The Company has concluded contracts concerning the production, sales, trademark usage, etc.
of Coca-Cola, etc., with The Coca-Cola Company.

Reason for increase in the number of shares

—

—

17

The Company increased the number ofshares of this company brand as it isa member of the shareholding association of
the counterparty company.

Reasons for appointment (Positions etc. are as of the time of appointment)
The Company has appointed Hiroko Wada as a Director (Outside Director) in order for her to utilize, for the management of theCompany, the considerable experiences and global knowledge she has gained thus far as officer at The Procter & Gamble
Company and as Representative Director at Toys“R”Us Japan Ltd. As no special vested interest exists between the individual
and the Company, the Company deems that no risk of conflict of interest with general shareholders exists and has appointed theindividual as an independent director.

Attendance

Total book value of shares (million yen)

Unlisted stocks

Reasons for appointment of outside directors
Category/Namebusiness partners and local communities. The Company shallevaluate and report on the cost of holding major cross-shareholdings
and the return on investment thereof in Board Meetings, and workon reducing the cross-shareholdings based on such evaluations.

Brands that the Company increased the number of shares in 2022
Number of companies

Total amount by selling and decreasing
the number of shares (million yen)

Unlisted stocks

5913

Stocks other than unlisted stocks

11

1,422
Securities Reporthttps://en.ccbj-holdings.com/ir/library/securities.php

Responsible dialogue with stakeholders through IR Activities
With the goal of timely and appropriate information disclosure and constructive dialog with shareholders and investors, we engage in a varietyof Investor Relations (IR) activities in which we explain our business strategies, business activities, financial and non-financial information, andother information through quarterly earnings presentations and IR meetings.
Main IR activities in 2022
Activity
Earnings Presentation

2022 results
Four times

Details
Quarterly earnings presentations were held by the President and CFO.
The briefing content is available via Webcast on the Company’s website.
(https://en.ccbj-holdings.com/ir/library/presentation.php)

IR meetings with analysts andinstitutional investors

About 250 times;
about 390 persons

Meetings and conference calls were held with analysts and institutional investors.
Top management took part as required.

Participation in domestic andoverseas conferences

Six times

Five times in Japan, and once overseas. Top management took part as required.

Other IR briefings

Four times

Held small meetings and IR briefings with participation by top management.

Delivery of video message
from the President

Four times

Video messages from the President were delivered to investors.
The latest video messages are available from the Investor Relations page of our website.
(https://en.ccbj-holdings.com/ir/)

Sanket Ray is president of the India and Southwest Asia Unit at The Coca-Cola Company. He has displayed strong leadership,particularly in commercial roles, at the company and has extensive management experience at the Company’s business units in
Asia. He is expected to offer advice based on his abundant experience as a global company manager, in areas of importantmanagement decisions, response to foreseeable risks, internal control systems, etc. Accordingly, the Company has appointed
him as an outside director who is an Audit & Supervisory Committee member.
Relationship with the Company: The Company has concluded contracts concerning the production, sales, trademark usage, etc.
of Coca-Cola, etc., with The Coca-Cola Company.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

79

Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Governance

Financial /Corporate Information

80

Financial / Corporate Information

Overview of Full-Year 2022 Results
Analysis of Operating Results
Coca-Cola Bottlers Japan Holdings Inc. (“CCBJH,” the “Company,”or “we”) have announced full-year results for the fiscal year (January
1, 2022, to December 31, 2022). In this fiscal year, the total
domestic nonalcoholic ready-to-drink (NARTD) beverage industry
volume has grown by 4% versus the previous fiscal year. This wasdue to demand being supported by recovery in the number ofpeople returning to the streets of Japan with the easing of
COVID-19 restrictions, revitalization of economic activity, and arecord-breaking heat wave contributing to volume growth, while theprice revisions implemented by various beverage companies
impacted demand.
On the other hand, the business environment remained
uncertain and challenging as the severe competitive environment
continued and rising commodity and utility prices, as well as the
rapid acceleration of the yen’s depreciation impacted business andconsumer behaviors. Under these circumstances, we positioned
2022 as “The year of building a foundation for sustainable growth”
and built a foundation for steady and sustainable growth as well as
to promote further transformation. In commercial activities, we
worked to grow sales volume and sales revenue by introducing new
products, responding to diversifying consumer needs, andexecuting effective campaigns to capture opportunities for therecovery in traffic. In addition, to respond to current cost pressuresand to strengthen the earnings foundation for the future, we revised
prices for our products ahead of the industry despite the continued
severe competitive environment. For the price revisions, we carefully
negotiated with customers and made efforts to reflect revised prices
as soon as possible, particularly for vending machines. In
manufacturing and supply chain fields, while faced with risingcommodity and utility prices, we built a supply chain that can
flexibly respond to sudden changes in demand by revamping ourSales and Operations Planning process and leveraging our Saitama
and Akashi Mega Distribution Centers, two of the largest automateddistribution centers in Japan by storage and shipping capacities.
Although we experienced a surge in demand during thesummer-the period of peak demand- coinciding with a recovery intraffic and the heat wave, our efforts resulted in a stable supply of
products. We worked to reduce costs through efficient use of
manufacturing facilities and reviewing our distribution network.
In addition, we realized ESG targets that are based on creating
shared value with society. To achieve our 2030 Package Vision,
which aims for a World Without Waste, we worked on the design
aspects of product packaging, such as expanding the use of 100%
recycled PET bottles and establishing a recycling scheme incollaboration with local governments and partner companies for thesteady collection of high-quality packages. In addition, for further
recycling of resources, we have established the CAN to CAN horizontal
recycling system of aluminum cans and started manufacturing andselling products produced from recycled materials. To reducegreenhouse gas (GHG) emissions, we enhanced our climate-related
financial disclosure and promoted activities based on therecommendations of the Task Force on Climate-related Financial
Disclosure (TCFD). In other efforts to contribute to local communities
through business, we implemented water source conservation
activities, donated products to food banks, and placed vending
machines to support local activities. As part of our efforts to promote
diversity, we worked to raise understanding of LGBTQ throughinternal and external awareness-raising opportunities to create a

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

Analysis of Financial Position
better working environment. Such ESG initiatives have been positively
appraised, and for the fifth consecutive year we have been selected
as a component of the DJSI Asia Pacific, a leading global ESG
investment index. Details for the fiscal year earnings are as follows.
Business Performance Summary(Unit: millions of yen)

2021

2022

Change (%)

Revenue

785,837

807,430

2.7

Business loss

(14,662)(14,443)—

Net loss attributable toowners of parent(2,503)(8,070)—*1 “Business loss” is a measure of our underlying or recurring business performance.
Business Loss deducts cost of goods and selling, general and administrative
expenses from revenue, and includes other income and expenses which we
believe are recurring in nature.
*2 Net loss attributable to owners of parent for 2021 is a total of continuing operationand discontinued operation results.

Consolidated revenue was 807,430 million yen (2.7% increaseof 21,594 million yen from the same period of the previous year).
Although there was negative impact on sales volume following theprice revisions, sales volume increased by 3% versus the previous
year. This was due to the introduction of new products andchannel-specific efforts to meet diversifying consumer needs, which
supported capturing the opportunity of traffic recovery and increased
demand due to the heat wave. Volume growth in the profitablevending channel and the improvement in wholesale revenue percase through price revisions contributed to the increase in revenue.
In the fourth quarter (October 1, 2022 to December 31, 2022), withthe price revisions implemented in October for small package
products, wholesale revenue per case improved in all channels.
Consolidated business loss was 14,443 million yen (14,662
million yen loss in prior year period) and improved versus theprevious year. We have achieved profit improvement of about 20
billion yen in areas that are under our control, such as volume
growth, price revisions, and cost savings through improved
manufacturing, logistics efficiency and acceleration of transformation.
However, external factors such as commodities, yen depreciationand higher utility costs had significant impact on our business.
Consolidated operating loss was 11,513 million yen (20,971
million yen loss in prior year period). In addition to business income
improved versus the previous year, operating income improved
versus the previous year due to gains on sales of fixed assets and adecrease in temporary paid leave expenses. Other income(non-recurring) for the fiscal year included gains on sales of property,
plant, and equipment of 4,561 million yen and 3,329 million yen ingovernment subsidies for employment adjustment. Other expenses(non-recurring) included 2,168 million yen in temporary paid leave
expenses, 1,298 million for transformation related expense, 1,104
million yen in special retirement allowances related to the voluntary
employee retirement programs, and 812 million yen in losses on sales
and disposals of property, plant, and equipment.
Net income attributable to owners of the parent was a loss of
8,070 million yen (2,503 million yen loss in prior year period). While
operating income improved from the previous period, income
attributable to owners of the parent company got worse due to theabsence of a gain on transfer of shares of subsidiary Q’sai Co., Ltd.
Recorded in discontinued operations in the previous year being
recorded in discontinued operations.

Assets at the end of the year were 826,737million yen, a decreaseof 40,375 million yen compared with the end of the prior fiscal
year-end period. This is mainly due to a decrease in “cash and cash
equivalents” resulting from redemption of bonds, and a decrease in“property, plant and equipment” because of balance sheet
improvement through consolidation of sales centers, while the
Akashi Mega DC was newly established.
Liabilities at the end of the year were 350,378 million yen which

decreased by 24,282 million yen from the end of the prior year
period. This is mainly due to a decrease in “Bonds and debts”
under current liabilities upon the redemption of bonds.
Equity at the end of the year was 476,358 million yen, adecrease of 16,093 million yen from the end of the prior year
period. This is mainly due to a decrease in “Retained earnings” as aresult of dividend payments.

Analysis of Cash Flows
The Cash Flows from Operation Activities
Net cash generated from operating activities was 41,717 million yen(35,982 million net cash generated in the previous year period). This
results mainly from the 12,491 million yen net loss before tax,
“Depreciation and amortization,” “Increase in other liabilities,” etc.
alongside “Gain on sale of property, plant and equipment” and“Increase in other liabilities,” etc.
The Cash Flows from Investing Activities
Net cash used in from investing activities was 23,090 million yen(15,271 million yen outflow in the previous year period). This
resulted mainly from “Acquisitions of property, plant and equipment
and intangible assets” etc., as a result of strategic, investments thatserve as a foundation for growth, alongside “Proceeds from sales ofproperty, plant and equipment and intangible assets” as part of theefforts to optimize the balance sheet.
The Cash Flows from Financing Activities
Net cash used in financing activities was 46,050 million yen (67,134
million yen net cash used in the previous year period), driven by“Payments for bond redemption” and “Dividends paid.”
As a result of these activities, cash, and cash equivalents at the endof the year was 84,074 million yen, a decrease of 26,422 million yen
from the end of the prior fiscal year-end.

Capital Expenditures
The Group implemented capital expenditure totaling 42,540 million
yen in the fiscal year ended on December 31, 2022. The
expenditures were mainly for the introduction of vending machines
to the market with the aim of strengthening sales capabilities,
improvement of manufacturing efficiency, acquisition of new productsupport facilities, and investments in Akashi Mega DC for
optimization of logistics networks in the Kansai area. Capital
expenditures include tangible fixed assets, right-to-use assets, andintangible assets.

Research and Development
No relevant matters apply.

Policies for Profit Distribution and Dividends
We periodically review its capital structure and dividend payout ratio
to maximize shareholder returns while maintaining flexibility to pursue
growth opportunities. We seek to use retained earnings to fundinvestment for sustainable growth for our business and further
enhancement of corporate value. We set a basic policy regarding
dividends, which includes active redistribution of profits while placing
the highest priority on paying dividends in a stable manner, bycomprehensively reviewing the business performance and level ofretained earnings. In addition, we have set a payout ratio target of

30% or more for net income attributable to owners of the parent. We
pay interim and year-end dividends.
We paid an interim dividend of 25 yen per share and a year-end
dividend of 25 yen per share for a total annual dividend of 50 yen per
share in the fiscal year ending December 31, 2022.
On future shareholder returns, we stay committed bycomprehensively reviewing its business performance trends andfinancial conditions, and examining the best approaches that could
be taken by including the share repurchase program.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

81

Introduction

Financial &Non-Financial Strategy

Value Creation Story

Sustainability

Risk Management

Governance

Financial /Corporate Information

82

Financial / Corporate Information

Key Financial and Non-Financial Data
JGAAP

2012

2013

2014

2015

2016

2017

IFRS

Operating Results (Fiscal Year):

2017

2018

2019

2020

2021

2022

Operating Results (Fiscal Year):

Revenue(Millions of yen)

386,637

431,711424,406

440,476

460,455

872,623

Revenue(Millions of yen)

837,069

927,307914,783

791,956

785,837

807,430

Gross Profit

Gross Profit(Millions of yen)412,782

452,151

441,060

362,916

350,505

351,755

(%)

49.3

48.8

48.2

45.8

44.6

43.6

(Millions of yen)

40,177

23,276

15,042

169(14,662)(14,443)(Millions of yen)

190,795

215,287

212,881

223,951

238,611450,249

Gross Profit Margin

(%)

49.3

49.9

50.2

50.8

51.8

51.6

Gross Profit Margin

Operating Income(Millions of yen)

13,463

15,927

11,00814,262

21,14340,579Business Income

(%)

3.5

3.7

2.6

3.2

4.6

4.7

Business Income Margin

(%)

4.8

2.5

1.6

0.0

—

—

EBITDA(Millions of yen)

—

—

—

—

—

—

EBITDA(Millions of yen)

81,56070,807

71,99359,08342,49831,343Net Income Attributable to Ownersof the Parent(Millions of yen)

6,031

13,625

4,482

9,970

5,245

25,244Net Income Attributable to Ownersof the Parent(Millions of yen)

21,967

10,117(57,952)(4,715)(2,503)(8,070)Cash Flows from Operating Activities(Millions of yen)

26,32440,082

28,62840,422

34,38872,450Cash Flows from Operating Activities(Millions of yen)

73,014

51,244

42,62943,71635,982

42,717

Cash Flows from Investing Activities(Millions of yen)

(14,243)(16,493)(9,590)(24,994)(19,921)(41,090)

Cash Flows from Investing Activities(Millions of yen)

(14,299)(48,628)(68,308)(52,076)

15,271(23,090)

Free Cash Flow

(Millions of yen)

12,08023,58819,037

15,427

14,46731,359

Free Cash Flow

(Millions of yen)

58,715

2,616(25,679)(8,360)51,253

19,628Cash Flows from Financing Activities(Millions of yen)

(7,149)(8,286)(37,498)

22,416(7,546)(26,159)

Cash Flows from Financing Activities(Millions of yen)

(26,717)(55,835)(73,994)

20,912(67,134)(46,050)

Cash and Cash Equivalents at
End of Fiscal Year

(Millions of yen)

39,49560,27541,83079,82886,727

118,741

Cash and Cash Equivalents at
End of Fiscal Year

(Millions of yen)

118,742

65,510113,825

126,378

110,497

84,074

Total Assets(Millions of yen)

337,348

374,418

337,260

378,105

377,468

883,918

Total Assets(Millions of yen)

929,304

877,472

952,444939,603

867,111826,737

Interest-Bearing Debt

(Millions of yen)

81,385

102,814

246,521271,233

214,124

179,970(Times)

0.1

0.2

0.5

0.5

0.4

0.4

(Millions of yen)

655,038

580,906

506,491

502,093492,451

476,358

Operating Income Margin

Cash Flow Status (Fiscal Year):

Cash Flow Status (Fiscal Year):

Financial Position (End of Fiscal Year):

Financial Position (End of Fiscal Year):(Millions of yen)

—

—

—

—

—

—

Interest-Bearing Debt

D/E Ratio(Times)

—

—

—

—

—

—

D/E Ratio

Net Assets(Millions of yen)

231,056

257,936

254,150

260,878

261,173

627,485

Net Profit per Share (EPS)

(Yen)

60.33

128.15

41.07

91.35

48.05

144.26

Basic Earnings per Share (EPS)(Yen)

125.5352.68(322.22)(26.29)(13.96)(45.00)Net Assets per Share (BPS)(Yen)

2,307.44

2,359.82

2,325.19

2,386.81

2,389.28

3,070.01

3,204.90

3,163.63

2,797.03

2,745.12

41.00

41.00

2,821.27

2,655.38

(Yen)

41.00

41.00

46.00

44.00

Equity Attributable to Owners of
the Parent per Share (BPS)(Yen)

Annual Dividend per Share
Consolidated Dividend Payout Ratio

(%)

68.0

32.0

99.8

44.9

95.7

30.5

Annual Dividend per Share

(Yen)

44.00

50.00

50.00

25.00

50.00

50.00

Stock Price at End of Year

(Yen)

1,333

2,227

1,661

2,457

3,445

4,115

Consolidated Dividend Payout Ratio

(%)

35.1

94.9

—

—

—

—

Stock Price at End of Year

(Yen)

4,115

3,285

2,791

1,609

1,320

1,437

Per-Share Information:

Total Equity
Per-Share Information:

Other Financial Data:

Other Financial Data:

Return on Equity (ROE)

(%)

2.6

5.6

1.8

3.9

2.0

5.7

Return on Assets (ROA)

(%)

4.1

4.7

3.0

3.8

5.5

6.3

Equity Income Margin Attributable to
Owners of the Parent (ROE)

(%)

4.6

1.6

(10.7)

(0.9)

(0.5)

(1.7)

Equity Ratio

(%)

68.4

68.8

75.2

68.9

69.1

70.9

Total Assets / Pre-tax Profit Ratio (ROA)

(%)

5.6

1.6

(6.1)

(1.3)

(2.4)

(1.5)

Price Earnings Ratio (PER)(Times)

22.1

17.4

40.4

26.9

71.7

28.5

Price Book Value Ratio (PBR)(Times)

0.6

0.9

0.7

1.0

1.4

1.3

Percentage of Equity Attributable to
Owners of the Parent

(%)

70.4

66.2

53.1

53.4

56.8

57.6

Capital Expenditure(Millions of yen)

20,031

20,242

22,783

16,181

25,72842,539Price Earnings Ratio (PER)(Times)

32.8

62.4

(8.7)

(61.2)(94.6)(31.9)

Depreciation(Millions of yen)

20,64323,75822,94324,04817,49137,352

Price Book Value Ratio (PBR)(Times)

1.3

1.0

1.0

0.6

0.5

0.5

(Millions of yen)

42,53953,136

103,882

65,52140,18442,540

Outstanding Shares at End of Year

(1,000 shares)

111,126

111,126

111,126

111,126

111,126

206,269

Depreciation and Amortization Expenses (Millions of yen)

41,38347,531

56,951

59,58357,16045,786

Treasury Stock at End of Year

(1,000 shares)

11,155

1,982

1,984

1,987

1,989

2,016

7,877

9,650

8,324

8,837

8,616

17,197

Number of Directors

10

11

12

11

14

9

Number of Outside Directors

2

2

2

2

4

4

Non-Financial Data (End of Fiscal Year):

Number of Employees at End of Year
Average number of temporary employees
not included in the above

1,890

2,059

1,949

2,613

2,499

4,403

Notes: 1. The data through 2016 represents results for Coca-Cola West Co., Ltd. prior to the business integration. The data for 2017 represents results for Coca-Cola Bottlers
Japan Holdings Inc. from the second quarter.
2. Amounts are rounded down to the nearest unit under Japanese standards and rounded up or down to the nearest unit under IFRS. Percentages are rounded up or down
to the nearest unit.
3. In December 2020, as a result of the decision to sell all shares in Q’sai held by the Company, the Healthcare and Skincare business has been classified as a discontinued
operation and assets and liabilities of the Healthcare and Skincare business have been classified as the assets held for sale and liabilities directly related to assets held forsales. Therefore, these are excluded from the above major financial data for 2020 and 2021.
This sale of shares was completed on February 1, 2021.
4. Figures for percentage of women in manager positions and women in manager and leader positions refer to the beverage business.
5. Water usage is the total amount of water used in the manufacture of products (excluding water in products) in the beverage business.
6. Greenhouse gas emissions refers to the supply chain emissions (Scope 1-3) in the beverage business. Some emission factors and the scope of data were revised from the2021 results.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

Capital Expenditure
Non-Financial Data (End of Fiscal Year):
Outstanding Shares at End of Year

(1,000 shares)

206,269

206,269

206,269

206,269

206,269

206,269

Treasury Stock at End of Year

(1,000 shares)

2,016

22,793

26,917

26,92026,92526,92817,197

17,10016,95916,27415,083

14,484

9

9

9

9

9

9

Number of Employees at End of Year
Average number of temporary employees
not included in the above

4,403

Number of Directors

3,578

4,008

3,777

3,416

4

4

6

7

7

7

(%)

—

3.9

4.2

5.8

6.3

6.6

Number of Outside Directors
Women in Manager Positions

3,957

(%)

—

6.8

7.3

9.3

9.9

10.0

(1,000 m3)—

13,99813,316

12,56012,993

13,287

Water Replenishment Rate

(%)

—

277

322

364

353

420

Greenhouse Gas Emissions(1,000 tons-CO2e)

—

—

2,347

2,076

2,366

2,339

Women in Manager and Leader Positions
Water Usage

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

83

Introduction

Financial &Non-Financial Strategy

Value Creation Story

Sustainability

Risk Management

Financial / Corporate Information

Financial / Corporate Information

External Evaluations (As of May 2023)

Company Overview and Stock Information (As of December 31, 2022)

Our initiatives to resolve social issues have been recognized by both the government and outside institutions.

Coca-Cola Bottlers Japan Holdings Inc.

EcoVadis Sustainability
SurveyReceived Silver rating in 2022

Nikkei SDGs
Management Survey
Awarded 4.0 stars in 2022

14,484

Number of employees

Nikkei Smart WorkManagement Survey
Awarded 4.5 stars in 2022

L-boshi Certification
Awarded 2 stars in 2019

Eco-First Program
Members
Certified in 2023

Green Partner 2022

Tokyo Metropolitan Government
Women’s Participation Awards
Awarded in 2021

New Diversity Management
Selection 100
Awarded in 2020

PRIDE Index 2022
Awarded Gold

PRIDE Index 2022
Awarded Rainbow

Number of shares per
trading unit

100 shares

Composition of shareholders (1 unit: 100 shares)(As of December 31, 2022)
Number of shares
owned (thousands)

Percentage ofvoting rights (%)

Coca-Cola (Japan) Company, Limited

27,956

15.59

The Master Trust Bank of Japan, Ltd. (Trust Account)

19,404

10.82

Custody Bank of Japan, Ltd. (Trust Account)

5,755

3.21

Ichimura Foundation for New Technology

5,295

2.95

Satsuma Shuzo Co., Ltd.

4,736

2.64

Senshusha Co., Ltd.

4,088

2.28

Coca-Cola Holdings West Japan, Inc.

4,075

2.27

Mitsubishi Heavy Industries Machinery Systems, Ltd.

3,912

2.18

MCA Holdings Co., Ltd.

3,408

1.90

Bnymsanvas Agent/Clients Lux Ucits Non Treaty 1

3,192

1.78

Shareholder

CDP 2022 Supplier
Engagement Rating survey
Selected for the highest rating asa “Supplier Engagement Leader”

206,269 thousand shares (Common share)

Note: The Company has issued only common shares, and has not issued any class shares or preferred shares

Major shareholders

CDP scores for 2022
Climate change “A”
Water security “A-”

Outstanding shares

Number of shareholders 77,268 (Shareholders with voting rights
excluding treasury stock: 60,500)

15,232 million yen

Capital
S&P/JPX
Carbon Efficient Index

500,000 thousand shares

Authorized shares

December 20, 1960

Founded2579

Securities code

Tokyo Midtown Tower, 9-7-1 Akasaka,
Minato-ku, Tokyo 107-6211, Japan

Headquarters

FTSE Blossom Japan
Sector Relative Index

84

Corporate Profile
Company name

Dow Jones Sustainability
Asia Pacific Index(DJSI Asia Pacific)

Financial /Corporate Information

Governance

Financial institutions
20.10%(41 shareholders,
358,920 units)

Individuals and others
15.97%(59,274 shareholders,
285,189 units)

Securities companies
4.13%(33 shareholders,
73,713 units)

Other domestic corporations
36.87%(695 shareholders,
658,321 units)

Foreign corporations
22.93%(457 shareholders,
409,471 units)

Note: Figures related to major shareholders, above, and composition of shareholders are calculated
and presented excluding 26,928 thousand shares of treasury stock held by the Company.

Bond Information
Total amount issued Coupon
rate (%)(Million yen)

Health & Productivity
Management Outstanding
Organization 2023
White 500

Certified as Sports Yell
Company 2023 by
Japan Sports Agency

Cancer Ally Award 2022
Received Silver

Good Career Company
Award 2022
Received Innovation Award

SSON Impact Award

Note: Awarded to CCBJH and some of its Group companies.
Also received the Director’s Award for Excellence in Disability Hiring in 2019 from the Bureau of Industrial and Labor Affairs, and obtained ISO 14001 (Environmental
Management System) certification and FSSC 22000 (Food Safety Management System) certification.

Maturity date

CCBJH 1st Series of Unsecured Straight Bond

40,0000.100

September 19, 2024

CCBJH 2nd Series of Unsecured Straight Bond

60,0000.200

September 18, 2026

CCBJH 2nd Series of Unsecured Straight Bond

50,0000.270

September 19, 2029

Rating Information
2020

2021

2022

Japan Credit Rating Agency, Ltd. (JCR) long-term issuer rating

AA-

AA-

AA-

Rating and Investment Information, Inc. (R&I) issuer rating

A+

A+

A+

Stock price and stock trading volume
Stock price (Yen)Participation in External Initiatives (As of May 2023)

Stock trading volume (1,000 shares)

30,00028,00026,000We are working to resolve social issues through participation in a number of external initiatives.

24,000

Nikkei Index (Close)

22,000CCBJH stock price
CCBJH stock trading volume

20,00018,00016,000The United Nations
Global Compact

The CEO Water Mandate

Task Force on Climate-related
Financial Disclosures (TCFD)

TCFD Consortium

GX League

4,000

35,0003,500

30,0003,000

25,0002,500

20,0002,000

Japan Climate Initiative(JCI)

Taskforce on Nature-related
Financial Disclosures (TNFD)

30by30 Alliancefor Biodiversity

Business for Marriage Equality(BME)

Business Support for LGBT Equality
in JapanNote: In addition, we have endorsed the Leading Tenant Action Policy from the Ministry of the Environment, which summarizes companies’ efforts at decarbonization. We havealso formulated and published “Declaration of Partnership Building” in support of the aims of building a sustainable relationship where large corporations and small andmedium-sized enterprises can grow together.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

1,500

15,0001,000

10,000

500

5,000

0

1

2

3

4

5

6

2020

7

8

9

10

11

12

1

2

3

4

5

6

2021

7

8

9

10

11

12

1

2

3

4

5

6

2022

7

8

9

10

11

12

1

2

3

4

(Month)02023

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

85

Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Governance

Financial /Corporate Information

Third-Party Opinion

Financial / Corporate Information

Group Companies
Coca-Cola Bottlers Japan Inc.

Kadiac Co., Ltd.

Principal
business

Manufacturing, distribution, and sales of beverage
products and alcoholic products

Principal
business

Head office

Tokyo Midtown Tower, 9-7-1 Akasaka, Minato-ku,
Tokyo 107-6211, Japan

Head office

We asked Professor Ishikawa, Specially Appointed Professor of Eikei University of Hiroshima and Professor
Emeritus of Kobe University, an expert in 3R (Reduce, Reuse, Recycle), waste policy and LCA (Life Cycle
Assessment), for his opinion on the report.

Operational business of vending machines
1 Senshu Airport Minami, Sennan, Osaka 549-0021,
Japan

Representative Calin Dragan, Representative Director, President and CEO

Representative Hisashi Terahara, Representative Director and President

Masaki Ishikawa

Coca-Cola Customer Marketing Co., Ltd.

Coca-Cola Bottlers Japan Business Services Inc.

Specially Appointed Professor and Assistant to the President, Eikei University of Hiroshima
Professor Emeritus, Kobe University

Principal
business

Sales and export / import of beverage products,
nonessential beverage products, and otherbeverage products

Head office

Roppongi Hills North Tower, 6-2-31, Roppongi,
Minato-ku, Tokyo 106-0032, Japan

Representative Maki Kado, Representative Director and President

Coca-Cola Bottlers Japan Vending Inc.

Principal
business

Shared service business to support the sales ofbeverage, nonessential beverage, alcoholic beverage,
dairy beverage, and food products, Management ofbeverage sales equipment

Head office

Tokyo Midtown Tower, 9-7-1 Akasaka, Minato-ku,
Tokyo 107-6211, Japan

Operational business of vending machines

Coca-Cola Bottlers Japan Benefit Inc.

Head office

Sumitomo Fudosan Shinjuku Central Park Building,
6-18-1 Nishishinjuku, Shinjuku-ku, Tokyo 160-0023,
Japan

Principal
business

Operation of Special subsidiary company, recruitmentof persons with disabilities within the group, support
for retention, and related office work operations, etc.

Head office180, Kano, Okegawa-shi, Saitama 363-8601, JapanFV Japan Co., Ltd.
Principal
business

Manufacturing, processing, and sales of beverage
products and office coffee service business, etc.

Head officeSunshine 60 Bldg., 3-1-1 Higashi-Ikebukuro,
Toshima-ku, Tokyo 170-6018, Japan

Representative Tatsuhiko Sano, Representative Director and President

Professor Ishikawa specializes in environmental economics/environmental systems analysis. Has served
as an expert on the 3Rs, waste policy, and LCA at government and municipal councils. Specially
Appointed Professor, Department of Social System Design, Eikei University of Hiroshima since 2019.
Established the NPO Gomi-Japan in 2006 to reduce the generation of waste. Engaged in various
initiatives as representative director of Gomi-Japan such as a program to reduce packaging. The
program was awarded the Good Design Prize (New Area Design Division) in 2007, the 3Rs
Distinguished Service Prize, Prime Minister’s Award and the Kobe Youth Prize 2012, the Low Carbon
Cup, Minister of the Environment Prize Gold Award (Community Activity Category) in 2015 and the18th Green Purchasing Prize, Grand Award in 2017.

Representative Bjorn Ivar Ulgenes, Representative Director andChairman, President

Principal
business

Representative Takahide Baba, Representative Director and President

My impression after reading the integrated report was thatwith various stakeholders, including consumers, local

Representative Narihiko Uemura, Representative Director and President

CCBJH is making steady efforts to realize the goal of a “World

governments, and distribution businesses. In this regard, theBannai Saketen Inc.

Without Waste (Zero-Waste Society)” and is achieving results

promotion of horizontal recycling, in which used PET bottles are

despite major external impacts to management, such as thecollected and recycled into PET bottles in cooperation withDistribution and sales of alcoholic products

COVID-19 disaster and the sharp rise in raw material prices.

Mitsubishi Estate Co., Ltd., Sugi Pharmacy Co., Ltd. and local

5-2, Jyoto-cho 2, Maebashi City, Gunma 371-0016,
Japan

Since the success of Coca-Cola’s I LOHAS, reduced

governments around the country, is particularly highly regarded

container weight has been promoted by many companies, andfrom the perspective of promoting voluntary collection by

is now making even greater progress, since it offers bothbusinesses and reducing CO2 emissions over the life cycle.

Principal
business
Head office

Representative Kengo Takenaka, Representative Director

Glossaryenvironmental benefits and reduced production costs. This is

In addition, the fact that activities aimed at horizontal

due to the fact that I LOHAS has changed consumer perception

recycling are not limited to “bottle-to-bottle” recycling of PETof extremely thin bottles from being difficult to use to a container

bottles, but have been expanded to “CAN to CAN” recycling ofthat is easy to crush. In the Integrated Report, I learned that thealuminum cans, pallets and shells used in logistics, and I think it

ELT

An abbreviation for Executive Leadership Team. Management organization in CCBJI Group including CEO andfunction heads.

fruits of this success are being harvested even more significantly

is an activity that should be expanded not only to the beveragewith the increase in lightweight products.

industry but also to other consumer goods in the future. In thisS&OP

An abbreviation for Sales and Operations Planning. S&OP is a method for optimizing the entire supply chain bysharing information among related divisions, such as manufacturing and sales, to accelerate decision-making.

In order to realize the goal of switching all PET bottles toCSV

An approach to resolving social problems through business and creating both economic value and social value.

DC

An abbreviation for distribution center.

Best practices

Refers to the most efficient techniques, methods, processes, or activities to achieve a certain result.
It also refers to the idea that there is a single technique or method that is the most efficient way to do a job.

Bottle-to-bottle

Collection, processing, and recycling of used PET bottles, which are then regenerated as PET bottles and used
as beverage containers.

SCM

An abbreviation for supply chain management. Refers to management methods that aim for total optimization ofefficiency in the flow of goods from production to final demand, including material procurement, manufacturing,
distribution, and sales. Can also refer to the overall mechanisms from production to final demand.

“Learn fromthe Forest” Project

Labelless products

World Without
Waste

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

86

respect, Coca-Cola Bottlers Japan Holdings, Inc. is a pioneer insustainable materials by 2030, as set forth in the “2030expanding the scope of its activities to address the plastics

Packaging Vision,” it is essential to collaborate and cooperateissue for businesses, and is highly commendable.

In response to the third-party opinion
We would like to express our sincere gratitude to Professor

steadily implement each of these strategies and, with regard to

Ishikawa for his valuable feedback. As the first year ofsustainability, we will work to achieve the non-financial goal of

A nationwide environment protection & education program implemented by the Coca-Cola System in 2006.
The purpose is to have people experience different activities such as planting trees in the forest or in source water
areas and nature programs to understand the importance of nature and water, the relationship between people andnature, and the significance of protecting the environment by coming in contact with the forest and living things.
This project is also positioned as one of Coca-Cola’s global source water protection activities.

publication of the Integrated Report, this document clearly“CSV Goals” and creating shared value (CSV) with society,lays out our financial and non-financial strategies to achieve

which is at the core of our management.

Products sold without labels on containers. These products eliminate the effort required to remove labels,
making garbage separation easier and reducing plastic waste, making it convenient to the home as well as
friendly to the environment.
The Coca-Cola Company announced in 2018 that it would work toward a “world without waste” by launchinga global initiative to reduce its environmental impact.

profitable growth for the CCBJH Group, placing the highest

Our desire is to create value for our stakeholders andpriority on improving structural profitability. We are gratefulcontinue to be the preferred partner for decades to come. We

for the recognition we have received for our efforts based

will continue our journey toward sustainable growth andon these strategies, particularly the strengthening of ourincreased corporate value by delivering happy moments tosustainability strategy promotion. Going forward, we will

everyone while creating value.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022